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                                                                   Exhibit 10.77

October 8, 2003

Mr. Paul Intlekofer
Chief Financial Officer and
Senior Vice President,
Corporate Development Nutrition 21, Inc.
4 Manhattanville Road, Suite 202
Purchase, NY 10577

Dear Paul:

This letter represents our understanding of the basis upon which C.E. Unterberg,
Towbin ("CEUT") is engaged to provide financial  advisory and investment banking
services to Nutrition 21 (the  "Company").  This letter  solely  relates to such
financial  advisory and  investment  banking  services and not to any  potential
investment in the Company by CEUT.

1.       The  Company  hereby  retains  CEUT to act as its  exclusive  financial
         advisor with respect to a best efforts private placement transaction of
         up to $10.0  million  of  common,  preferred  or debt  securities  (the
         "Securities").  The Company  will not offer any of the  Securities  for
         sale to, or  solicit  any offers to buy from,  any  person or  persons,
         whether directly or indirectly, otherwise than through CEUT, except for
         the list of names provided in Schedule A; provided, however, that under
         no circumstances  shall CEUT be liable for failure to obtain or produce
         the proposed financing.

2.       As part of our  engagement,  CEUT will  provide  the  Company  with the
         following services:

         a.       Subject to Company  approval,  identify and contact  potential
                  institutional and/or strategic investors;

         b.       As  necessary,  with  management  of the  Company,  meet  with
                  approved  potential  investors  and  provide  them  with  such
                  information furnished by the Company as may be appropriate;

         c.       Assist the Company in negotiating  with  identified  potential
                  investors; and

         d.       Assist  the  Company  and  the  Company's   legal  counsel  in
                  preparing documents related to the transaction and having such
                  documents  executed  in  order  to close  the  private  equity
                  financing  transaction  and  any  other  agreements  as may be
                  necessary.

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3.       As  compensation  for the  services  rendered  by CEUT  hereunder,  the
         Company agrees to pay CEUT the following amounts:

         a.       At each closing for the sale of  Securities,  a cash fee equal
                  to 6.0% of the value of the  Securities  sold at such closing,
                  together with common stock warrants (the "Warrants")  equal in
                  value  to 3.0% of the  Securities  sold at such  closing.  The
                  Warrants will expire on the fifth anniversary from closing;

         b.       In the event the Company  enters into a strategic  transaction
                  involving a  significant  portion of the equity of the Company
                  instead of, or in addition to, completing the proposed private
                  placement,  the Company  agrees to pay CEUT a cash fee for its
                  services  equal to the  greater of (i) the fee CEUT would have
                  earned for the  proposed  private  placement  (subject  to the
                  limitations contained in this letter) or (ii) a fee for acting
                  as financial  advisor to the Company in  connection  with such
                  strategic  transaction  (such fee to be consistent with market
                  practice  for  such   services  when  provided  by  nationally
                  recognized investment banking firms).

4.       The Company shall  reimburse  CEUT promptly upon request for all of its
         out-of-pocket  expenses,  including fees and  disbursements  of counsel
         incurred by CEUT in connection with its engagement hereunder.

5.       CEUT and the Company  have entered  into a separate  letter  agreement,
         dated the date hereof, providing for the indemnification of CEUT by the
         Company in connection with CEUT's  engagement  hereunder,  the terms of
         which are incorporated into this agreement in their entirety.

6.       For a period of 12 months from the date hereof,  the Company  grants to
         CEUT the right (provided this agreement has not been terminated by CEUT
         without  cause or by the  Company  with  cause) to  provide  investment
         banking  services to the Company on an  exclusive  basis in all matters
         for which  investment  banking  services are sought by the Company (the
         "Right of First Refusal"). For the purposes hereof,  investment banking
         services shall include, without limitation,  (i) acting as lead manager
         for any underwritten public offering of securities of the Company; (ii)
         acting as placement  agent or financial  advisor in connection with any
         private  offering of  securities of the Company;  and,  (iii) acting as
         financial  advisor in connection with any sale or other transfer by the
         Company,  directly or indirectly,  of a majority or controlling portion
         of its capital stock or assets to another entity, any purchase or other
         transfer by another  entity,  directly or indirectly,  of a majority or
         controlling portion of the capital stock of assets of the Company,  and
         any merger or  consolidation  of the Company with another entity.  CEUT
         shall  notify the Company of its  intention  to  exercise  the Right of
         First Refusal  within 15 business days  following  notice in writing by
         the  Company.  If CEUT  declines to serve as  investment  banker to the
         Company pursuant to the Right of First Refusal,  the Company shall have
         the  right to retain  any  other  person or  persons  to  provide  such
         services  on  terms  and  conditions,  which  are not  materially  more
         favorable to such other  person or persons  than the terms  declined by
         CEUT.

7.       The Company  recognizes  and confirms  that CEUT in acting  pursuant to
         this  engagement  will be  using  publicly  available  information  and
         information  in  reports  and  other


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         materials   provided   by  others,   including,   without   limitation,
         information  provided by or on behalf of the Company and that CEUT does
         not  assume  responsibility  for  and  may  rely,  without  independent
         verification, on the accuracy and completeness of any such information.
         The  Company  agrees to  furnish or cause to be  furnished  to CEUT all
         necessary or  appropriate  information  for use in its  engagement  and
         hereby warrants that any information  relating to the Company,  that is
         furnished  to CEUT by or on  behalf  of the  Company,  will be true and
         correct in all material respects and not misleading.

8.       The term of this engagement  shall extend until twelve (12) months from
         the date of this agreement and shall  automatically renew thereafter on
         a month-to-month  basis until  terminated,  in writing by either party.
         Any such  termination  shall not (except as provided herein) affect the
         compensation,  reimbursement, right of first refusal or indemnification
         provisions  set forth  herein,  all of which shall remain in full force
         and effect. In addition,  the Company shall be responsible for any fees
         as outlined above for any private financing  transaction  undertaken by
         the Company in lieu of the  contemplated  transaction  described herein
         with any investors contacted by CEUT that is concluded within 12 months
         of the date of termination of this agreement.

9.       Notwithstanding  its engagement as placement agent hereunder,  CEUT may
         not, without its prior written consent, be quoted or referred to in any
         document,  release or communication prepared,  issued or transmitted by
         the  Company  (including  any  entity  controlled  by, or under  common
         control with, the Company and any director,  officer, employee or agent
         thereof).

10.      Following  completion of this engagement,  CEUT shall have the right to
         place  advertisements in financial and other newspapers and journals at
         its own expense describing its services to the Company hereunder.

11.      This  Agreement  is  governed  by the laws of the  State  of New  York,
         without regard to such state's rules  concerning  conflicts of law, and
         will be binding  upon and inure to the  benefit of the Company and CEUT
         and their respective successors and assigns. The Company and CEUT agree
         to  waive  trial  by jury in any  action,  proceeding  or  counterclaim
         brought  by or on behalf of either  party  with  respect  to any matter
         whatsoever  relating  to or  arising  out of  any  actual  or  proposed
         transaction or the engagement of or performance by CEUT hereunder.  The
         Company also hereby  submits to the  jurisdiction  of the courts of the
         State of New York in any proceeding  arising out of or relating to this
         Agreement,  including  federal  district  courts located in such state,
         agrees not to commence any suit, action or proceeding  relating thereto
         except in such courts,  and waives,  to the fullest extent permitted by
         law,  the right to move to dismiss or  transfer  any action  brought in
         such  court on the basis of any  objection  to  personal  jurisdiction,
         venue or inconvenient  forum.  This agreement may be executed in two or
         more counterparts, each of which shall be deemed to be an original, but
         all of which shall constitute one and the same agreement.

CEUT will act under this  Agreement  as an  independent  contractor  with duties
solely to the Company.

The Company  acknowledges  that CEUT and its  affiliates may have and may in the
future have investment  banking and other  relationships with parties other than
the Company,  which parties


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may have interests with respect to this  placement.  Although CEUT in the course
of such  other  relationships  may  acquire  information  about  the  placement,
potential purchasers of the Securities or such other parties, CEUT shall have no
obligation  to  disclose  such  information  to  the  Company  or  to  use  such
information on behalf of the Company. Furthermore, the Company acknowledges that
CEUT may have fiduciary or other relationships  whereby CEUT may exercise voting
power over securities of various persons, which securities may from time to time
include  securities of the Company or of potential  purchasers of the Securities
or others with interests in respect of the placement.  The Company  acknowledges
that CEUT may  exercise  such  powers and  otherwise  perform its  functions  in
connection  with such  fiduciary or other  relationships  without  regard to its
relationship to the Company hereunder.

Please note that CEUT is a full services  securities  firm engaged in securities
trading and  brokerage  activities,  as well as  providing  investment  banking,
financing  and  financial  advisory  services.  In the  ordinary  course  of our
trading,  brokerage and financing activities,  CEUT or its affiliates may at any
time  hold  long  or  short  positions,   and  may  trade  or  otherwise  effect
transactions,  for our own  account or the  accounts  of  customers,  in debt or
equity  securities  or senior loans of the Company or any other company that may
be involved in the transactions contemplated by this Agreement.

If the foregoing  correctly sets forth the  understanding  and agreement between
CEUT and the Company,  please so indicate in the space provided for that purpose
below,  together  with the enclosed  duplicate  original,  and return one (1) of
these  originals  to us,  whereupon  this  letter  shall  constitute  a  binding
agreement as of the date hereof.


Sincerely,

C.E. Unterberg, Towbin

By: /s/ Christine Gallagher
    ---------------------------
    Managing Director


Approved and agreed to as of October 8, 2003:

Nutrition 21, Inc.

By: /s/ Paul Intlekofer
    ---------------------------
    Paul Intlekofer
    Chief Financial Officer and Senior
    Vice President, Corporate Development


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