Gained in the first part of Cloakwood if the party allies with the group of druids against Aldeth Sashenstar. If you side with Aldeth, he'll give the sword as a reward when you complete another task for him in SW BG.
The sword can also be stolen from a locked commoner's house in Ulgoth's Beard. However, attempting to steal the sword will automatically summon the guards, regardless if the commoner herself is charmed, dead, or otherwise not in the room.
Bastard sword +1, +3 vs. shapeshifters: 'Kondar'. At a first glance, this sword appears as much like any other. In the presence of a shapeshifters however, the blade becomes warm as its power stirs. Its namesake was the original owner of the weapon, and his tale, through mostly long forgotten, was wrought with treachery and deceit. Rumors persist that he paid a fearsome price for this blade, but with it he revealed the true identities of those that sought to betray him. Their names and crimes however, are long since lost to history.