Why does he have an alignment of 10, if he belongs to the Molochean Hand and is after you? I always tend to not kill him if I'm playing a good character, since it will lower my alignment no matter what.
They didn't always reset alignment when they made the game, theres a lot of NPCs and its pretty easy to miss a few. Just let him get in the first blow and then since he started it you can kill him without loosing any alignment.
For some reason I still lose alignment when trying that, even if I let my followers do the dirty work all by themselfs. Strangely enough Magnus doesn't complain, even if I attack the Half-Ogre first.
Then it's jjst something Troika missed. You can regain your lost alignement by giving ten gp's to any beggar in any of the towns.
Oddly enough, giving alms to the poor never helps my alignment. Berating them sure lowers it, though. If you're that worried about your alignment, simply take the most polite dialogue choices. Well, those and the ones that scream "I'm a good person!"
In other words, put your cursor over the option, if your sugary goodness indicator goes up so high you feel like throwing up, thats the one you want.