Walkthrough

The quest starts from a notice board and is rather short, but gives you one of the best silver swords in the game.

Head to the small lake (Lac Celavy) with a donut shaped island in the middle, north-west of Beauclair. On the north side of the island you will find a set of five stones, one each for the five chivalric virtues of Toussaint.

At the smaller lake within a lake you will find a hermit and that you can walk on water. If your Geralt has demonstrated each of the virtues you will be invited to fight the hermit to win the sword beneath the lakes surface. Upon winning the fight the hermit heads beneath the water and returns with the sword, in true form as the Lady of the Lake.

Aerondight, the sword you receive, is a relic silver sword which increases damage with each blow it lands in a fight.

Video Walkthrough

VIRTUES:

1) Compassion - Main Quest: The Beast of Toussaint - After fighting the Shalemaar in the arena decide to spare its life.
or during Side Quest: Goodness, Gracious, Great Balls of Granite!, not returning the stones to the art curator.
or during Side Quest: Contract: Big Game Hunter, if you are invited to his art show and ask about his daughter.
2) Generosity - Go to Main Square of Beauclair and a child will deliver a letter to you. Give him 5 crowns for his trouble.
3) Honor - Side Quest: The Warble of a Smitten Knight - After the horse race choose to accept the mounted duel against the prince and win it.
or during Side Quest: Goodness, Gracious, Great Balls of Granite!, return the stones to the art curator.
4) Valor - Side Quest: The Warble of a Smitten Knight - After following the girl into the woods and returning to camp, decide to finish the tourney and win.
5) Wisdom - Main Quest: La Cage Au Fou - Thoroughly explore the Wight's Lair and when hiding in the closet try to lift the curse instead of attacking.