The Blue Banner of Killorn was lost in the war against Praecor Loth and stored in his tomb. Ogri in Ultima Underworld II wanted the Avatar to return it to Killorn Keep, promising a reward for that task. The Avatar found the banner at Praecor Lorth's grave after helping him find eternal rest. Upon returning it to Ogri, the Avatar was told about what kept Killorn Keep floating in the air.
The Banner returned to decorate the main hall of Killorn Keep.