Lothar's Innocence - Act 2 Companion Side Quest
Location: Southern Vai'lutra Forest
Closest Portal: Southern Vai'lutra Forest (North)
Objective: Speak with Magrus in a cave then fight him in his house
Reward: Random Loot & Gold
Lothar's Innocence begins by speaking with Roland in the Aman'lu Tavern so long as you have Lothar in your party. This quest is Lothar's Companion quest; each recruitable character in Dungeon Siege 2 will get their own Side Quest for you to complete. When doing the Companion Quests it is recommended you keep the character in your party at all times. Usually each task/step of the quest can not be completed unless you have the character in your party.
For the first part of this quest you will need to travel to a cave in the Southern Vai'lutra Forest (pictured below). Speak with Magrus inside of this cave and he'll flee from you back to his house which is also in Southern Vai'lutra Forest. Use my screenshot below if you'd like to see the map location of this cave as well as Magrus' house.
At Magrus' house you'll have to speak with him and then fight him to complete this part of the quest. Once beaten he'll return to Aman'lu with his metaphorical tail tucked between his legs and be waiting for you with Roland in the Aman'lu Tavern. Return to the Aman'lu Tavern and speak with Roland to complete the quest and to retrieve your minor reward.