Re: preceding/following character?

<xsl:template match="cite[not(following-sibling::node()[1][self::text()[starts- with(.,'.')]])]">
<xsl:apply-templates mode="clean" select="."/>
</xsl:template>

<xsl:template match="text()[preceding-sibling::node()[1][self::cite]][starts- with(.,'.')]">
<xsl:text>.</xsl:text>
<xsl:apply-templates select="preceding-sibling::cite[1]" mode="clean"/>
<xsl:copy-of select="substring(.,2)"/>
</xsl:template>

$ saxon cite.xml cite.xsl
<?xml version="1.0" encoding="utf-8"?><div>
Some text and more text .[XXX1] Some <EM>more</EM> text. Some text
and more text .[XXX2]ffff[XXX3]

Some text and more text [XXX1]<EM>. Some more</EM> text. Some text
and more text .[XXX2]ffff[XXX3]
</div>