No need to buy a repair manual. It is available online for W123 chassis:
http://www.startekinfo.com/StarTek/outside/12265/?requestedDocId=12265
The car has a vacuum pump, it's up at the front of the engine on the right hand side near the power steering and A/C compressor. Follow the thick vacuum line that runs from the brake booster to the front of the engine and you'll find it.
However, it's not the cause of your problem here. Vacuum problems would lead to a hard brake pedal, as the booster uses vacuum to assist braking.
A soft pedal and the light being on means that the fluid is likely low. Which is usually indicative of a leak.