Many licensing and technology transfer agreements have sweeping confidentiality provisions.  Often, the agreements require the parties to preserve as confidential not only the source code or trade secret information to be exchanged.  They also preserve as confidential even the terms of the agreement.  The licensor may have good reasons for insisting on that broad confidentiality, including that the licensor doesn't want one heavily-negotiated version of its form license posted on the Web, immediately bringing other licensees to the low-water mark of what was negotiated with one particular company with a lot of leverage. 

But without some clear exceptions to this confidentiality requirement, the result is a clause that makes no sense to either party in the real world:  The licensor wants to book the revenue, but, by its terms, can't show the agreement to its accountants to demonstrate that the royalties are actually due.  A party's successor by merger wants to enforce the agreement, but (1) nothing in the agreement says it can be disclosed to a court even in litigation over the agreement, and (2) on its face, the agreement doesn't even allow a party to share its contents with a merger partner.  (And how is a company to get to a merger, financing or sale, if it can't disclose the terms of key intellectual property agreements?)

Presented with these practical problems under this common contract provision, many lawyers and business people shrug, saying (with substantial justification) that there's an implied or understood exception, as everyone knows.  But do you want to have to explain that to a jury?  What are exactly the contours of this implied exception?  Having signed a confidentiality clause with the buyer of your business, do you want to immediately show them that you're ignoring your confidentiality agreement with someone else?  And if you're going to argue that this clause doesn't mean what it says, doesn’t that invite a similar discussion about the other provisions of the agreement like, say, royalties and scope of license?

It makes more sense to apply a simple fix to the confidentiality clause itself.  The standard problems can be avoided by just adding some language like the following at the end of the standard exceptions to confidentiality, to make the provision work in the real world:

Notwithstanding the foregoing, the Parties can also disclose this Agreement and its material terms (the "Agreement Terms") (1) to their attorneys and accountants who are under a duty to preserve this information as client confidential information; (2) to any mediator, arbitrator, or court in connection with any dispute and dispute resolution under this Agreement, with appropriate provisions (submission under seal) to preserve confidentiality of the Agreement Terms; and (3) to prospective or actual investors, purchasers, asset purchasers, successors, finders, investment bankers, and underwriters of either Party who have executed a binding agreement ("Third Party Agreement") to preserve the Agreement Terms as confidential, so long as the Third Party Agreement lists both Parties as intended beneficiaries and may be enforced by either Party.