Dropped by Reaver of Xalgoz. Not to be confused with Xalgoz himself.
This mob is found on the main level. Beyond the library, through the "Backyard". All right turns after backyard if I remember correctly. (I think you can get here by taking a few lefts from the entrance too. Just be prepared for a Big Fall.)
If you / your group can clear the library. You should have no problem with this guy.
well, i dont know exact price but judging from stats expect to pay close to 1k. blade of xalgoz = dmg 23 dly 40 str 3 agi 3 mgk 2hs, and it sells for 1k about on innoruuk. this looks like a great wep for getting 2hb skill up. most i'd pay is 800-900, unless i was in a tight squeeze and really needed it. hope it looks cool!