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Each side quest you complete, The Avatar's experience (EXP) increases

Blorn's Accusations
A discussion with the pub owner reveals that Blorn is a gargoyle hater. Talk to Blorn about Gargoyles and tell him that you are not a Gargoyle "lover". He will tell you that awhile ago he was attacked by a particularly violent gargoyle, and asks for your help in seeking revenge. He wants you to surprise Lap-Lem, his "attacker", and slay him. Instead go talk to Lap-Lem about what happened, and he will tell you that in fact Blorn robbed Lap-Lem not the other way around. Go back to Blorn, and ask him to return the Amulet, then give it back to Lap-Lem.

Where does Catherine go?
Talking with Yvella, you will find that her daughter Catherine, disappears around noon everyday. Catherine goes to the Gargoyle side of town to hear stories from For-Lem. For-Lem asks you to keep it quiet. If you tell Yvonne what you know, her husband will kill For-Lem, but you don't wanna do that.