Osric is at #11 on the Admeth's Den map. He had a falling out with the Knights of the Crucible, and would like you to retrive his armor from them for him.
After that, it becomes a matter of confirming that the Affidavit is a forgery. The entrance to the Hadret House is at #14 on the Brackenbury map.
You start of at #1 on the map of the lower floor of the Hadret House. Kurren will be at #4. You can show him Penhelm's Affidavit during the dialogue, and he will affirm that it's a forgery.
He also suggests that you can have Commander Clyver of the Crucible Knights verify the fact of the forgery, although I do not think this is truly necessary to complete the quest.
Penhelm and a band of Novitiates will confront you once you leave the Hadret House. There are multiple ways to deal with the situation:
It's fairly easy to get into a fight with them, which shouldn't be difficult to win. The Clever and Cruel responses that are available at the outset will start the fight. The Honest reply will preserve some element of choice, but any other dialogue option other than offering to give him Penhelm's Affidavit will also result in a fight. If you win, the loot includes a Mace, several Helms, several Swords, and several Breastplates. Penhelm himself will leave behind Osric's Family Breastplate, which you can then bring back to Osric to complete the quest.
You can give Penhelm's Affidavit to Penhelm, and without demanding anything in return. This action earns a moderate reputation increase with the Knights of the Crucible, but will also permanently end any association you may have with the Dozens.
You may demand Osric's Family Breastplate back after giving him Penhelm's Affidavit, but when asked why, emphasize that it's important to Osric. Penhelm will leave without providing anything in return, making this the least desirable path.
You may demand Osric's Family Breastplate back after giving him Penhelm's Affidavit, and then select either the Diplomatic or Passionate replies. Either one will result in you receiving 200cp, but no Breastplate.
As previously mentioned, you won't be able to go any further with Osric or the rest of The Dozens if you let Penhelm walk away with Osric's Family Breastplate. If you do come back to Osric with the Osric's Family Breastplate, whether you let Penhelm live or not, Osric will reward you with 2,000cp, and a moderate gain of reputation with The Dozens. You'll also be able to take on the Bronze Beneath the Lake quest, although that will require your complete commitment to The Dozens and thereafter not being able to complete quests for either House Doemenel or the Knights of the Crucible.
If you had killed Penhelm and his Novitiates, then in addition to the above rewards, you would also acquire a minor gain of positive reputation with Defiance Bay.
Finally, another benefit of completing the quest to Osric's satisfaction is that Sonild, at #6 on the Admeth's Den map, will now make her wares available for your purchase.
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"That's it...time to move on, places to go and all that. The way you're going, you're just going to end up like Golodon the Unmanned. And I didn't want to see that the first time." -Jan Jansen, Baldur's Gate II
Penhelm and a band of Novitiates will confront you once you leave the Hadret House. There are multiple ways to deal with the situation:
