It's a directory to store private application content. Anything your app needs but your client doesn't can be stored there. Anything in that directory is not visible to the web.
Source:
http://tomcat.apache.org/tomcat-7.0-doc/appdev/source.html#Directory_Structure
http://docs.oracle.com/cd/E13222_01/wls/docs70/webapp/basics.html#136976
