A powerful sword lies in a glass case in the town of Jotan. It has many protectors, so beware.
The quest:
From the cliff south of Lirath, 2n, 2w, 4nw, s, e, se, sw (you are in Jotan town square), 4e, 2s, down, break glass (3 demons attack), kill them and get the sword from the corpses.
To leave Jotan, u, 2n, 4w, 2ne, w, n, 4se, 2e, 2s (back to the cliff)
Tips:
The Sword of the Empire is not worth using to my knowledge. It's a pretty good two-handed weapon, but wraiths periodically attack when you use it. Give it to one of those annoying newbies.