The team descends further beneath the city, going through dwarf and drow territory, to Xanathar's lair, where the final confrontation takes place. As they descend, the entrance gets blocked by a sudden collapse, all planned by Xanathar. With the official document, basic adventuring gear and a package of information, the adventurers enter the city's sewer system. The guards confiscate the drow's package of information, and Khelben sends it to the adventuring group. The spy reveals that the beholder crime lord, Xanathar, inhabits the lowest parts of the Waterdeep sewer system. Under interrogation, the drow reveals the disturbing plan of an evil beholder (who had recently teleported the elf to the surface). Two days before the adventuring group are due to search underground, the captain of the guard intercepts a drow scout that is spying on the council. The Heroes of Waterdeep accept the commission and letter of Marque. The council holds a ceremony, and write up an official document known as the commission and letter of Marque, and sends the adventurers away to prepare. Khelben returns to the council and tells Piergeiron to hire adventurers to look where they haven't - under the city. He warns that the evil must come from inside Waterdeep, or more, under their very noses. After this, Khelben writes to Piergeiron the Paladinson, Open Lord of Waterdeep. The wizard uses his mages to detect evil, but cannot locate its exact source. Arunsun's informants are clear on one thing - the word Xanathar recurs with great persistence. He, however, finds no evidence of devious plots outside of Waterdeep, and believes such evils must be coming from within. There are rumors of assassins wondering the streets, so the mage visits both Amn and Calimshan, as such places had given Waterdeep issues in the past. Luckily, Khelben 'Blackstaff' Arunsun looks into lords' concerns - that an unknown evil poses a threat to Waterdeep. The lords of the city of Waterdeep have grown concerned with mysterious happenings within the city.

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