Second Amendment to Convertible Preferred Stock Purchase Agreement dated August 13, 1997

                                XOMA CORPORATION


                                Second Amendment
                                       to
                 Convertible Preferred Stock Purchase Agreement
                              dated August 13, 1997


     This  AMENDMENT,  dated  as of June  26,  1998  (the  "Amendment"),  to the
Convertible  Preferred  Stock  Purchase  Agreement  dated  August 13,  1997 (the
"Purchase  Agreement"),  among XOMA Corporation (the "Company") and the entities
who  have  signed  this  Amendment,  as  set  forth  below  (collectively,   the
"Purchasers").

                              W I T N E S S E T H:

     WHEREAS, the parties hereto are parties to the Purchase Agreement, pursuant
to which the Purchasers acquired shares of Series G Convertible  Preferred Stock
of the Company; and

     WHEREAS,  the Purchase Agreement provides for an additional closing for the
issue and sale by the  Company  to the  Purchasers  of an  additional  series of
convertible preferred stock of the Company; and

     WHEREAS,  the parties  desire to amend  certain  provisions of the Purchase
Agreement, effective as of the date of this Agreement.

     NOW THEREFORE,  the parties agree that the Purchase Agreement is amended as
follows:

     1.  Defined  Terms.  Capitalized  terms  used  in  this  Agreement,  unless
otherwise defined herein, have the meanings set forth in the Purchase Agreement.

     2. Revised Schedules.  The Purchase Agreement is hereby amended by deleting
in their  entirety  Schedules  2.1(c) and 2.1(t)  thereto and  inserting in lieu
thereof the corresponding schedules attached hereto.

     3. No Other  Amendments.  Except as  specifically  amended or  supplemented
hereby,  (i) the  Purchase  Agreement  shall not be  amended  and no  provisions
thereof shall be waived by any party, and (ii) the Purchase  Agreement is hereby
ratified and confirmed in all respects.



                                      -2-


     4.   Counterparts.   This   Amendment  may  be  executed  in  two  or  more
counterparts,  each of which shall be deemed an original  and all of which taken
together shall constitute a single instrument.

     IN WITNESS WHEREOF,  the undersigned have executed this Amendment as of the
date first written above.

XOMA CORPORATION                    SOUTHBROOK INTERNATIONAL
                                    INVESTMENTS LTD.


 By:_________________________       By:_________________________


 HBK CAYMAN L.P.                    HBK OFFSHORE FUND, LTD.



 By:_________________________       By:_________________________


 HBK INVESTMENTS LTD.               XXXXXXXX CAPITAL MANAGEMENT, INC.
                                    (formerly Proprietary Convertible
                                     Investment Group, Inc.)


 By:_________________________       By:_________________________


PINE STREET ASSET                   XXXXX XXXXXXX STRATEGIC
MANAGEMENT L.P.                     GROWTH FUND, L.P.



 By:_________________________       By:_________________________