The Sword of Retribution can be obtained on the 3rd map for Wayne; I forgot the name.
There, you need to complete a bunch of quests related to the Kregg Heggem - something similar to searching for the Holy Grail.
That is, you need to visit 3 obelisks, and then a passage to a cave will open, where there are all sorts of goodies, including this sword.
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