REGISTRATION RIGHTS AGREEMENT

     THIS  REGISTRATION  RIGHTS AGREEMENT (this "Agreement") is made and entered
into  as of January __, 2004, by and between INTERACTIVE GROUP, INC., a Delaware
corporation (the "Company"), and the individuals listed on the signature page of
this  Agreement  who,  concurrently  with  the  execution  hereof,  are becoming
stockholders  of  the  Company (individually, a "Stockholder," and collectively,
the  "Stockholders").

     A.   The  Company has entered into that certain Stock Purchase and Exchange
Agreement dated December 10, 2003 (the "Exchange Agreement"), by and between the
Company and Arrowhead Research Corporation, a California corporation ("Arrowhead
Research"),  which  provides,  among  other  things,  for the acquisition by the
Company  of  all of the outstanding securities of Arrowhead Research in exchange
for  the  issuance  by  the  Company  of a control block of the Company's Common
Stock.

     B.   Arrowhead  Research  was  incorporated  under the laws of the State of
California  on  May 7, 2003, issuing to the founders thereof 3,000,000 shares of
common  stock  and warrants to purchase an additional 3,000,000 shares of common
stock  at  the  price  of  $1.50 per share.  In October 2003, Arrowhead Research
completed  a  private  placement  in  which it issued and sold, for an aggregate
purchase price of $2,645,000, Units each consisting of one share of common stock
and  a  warrant to purchase an additional share of common stock for the price of
$1.50.  Since  its  incorporation  in  May  2003, the business and activities of
Arrowhead  Research have been limited to organizational matters, preparation and
completion  of  the private placement, and the development of an initial plan of
proposed  operations.  Pursuant  to  its  initial  plan  of proposed operations,
Arrowhead  Research  has entered into arrangements with the California Institute
of Technology, Pasadena, California ("CalTech"), and three individual professors
on the faculty of CalTech, with respect to the financing of research projects in
various  aspects  of  nano  technology  development

     C.   If  the  transactions  contemplated  by  the  Exchange  Agreement  are
consummated,  the  former  shareholders  of  Arrowhead  Research  would  own
approximately  88.9%  of  the  shares  of  the  Company's  Common  Stock  then
outstanding,  and  the  current  stockholders  of  the  Company  would  retain
approximately  11.1% of its then outstanding shares of Common Stock.  The former
shareholders  of  Arrowhead  Research  would  also  receive warrants to purchase
additional  shares  of  the  Company's  Common  Stock,  in exchange for warrants
previously  held  to  purchase shares of the common stock of Arrowhead Research.

     D.   Among  other  conditions  to the Closing under the Exchange Agreement,
the  Company is required to have executed and delivered this Agreement, pursuant
to which (i) all of the shares of the Company's Common Stock and (ii) all of the
warrants  to  purchase shares of the Company's Common Stock issued to the former
shareholders  of Arrowhead Research pursuant thereto, together with (iii) all of
the  shares of the Company Common Stock issuable upon exercise of such warrants,
shall be registered for resale under the Securities Act of 1933, as amended (the
"Securities  Act").


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     E.   The  Exchange  Agreement provides that this Agreement shall also cover
any and all shares of the Company's Common Stock and warrants to purchase shares
of  the  Company's  Common  Stock  issued  in connection with the acquisition of
certain  intellectual  property  from  San  Diego  Magnetics, Inc., a California
corporation  ("SDM"), and in connection with the compromise, cancellation and/or
conversion of substantially all of the Company's existing debt and other balance
sheet liabilities, together with all shares of the Company's Stock issuable upon
exercise  of  such  warrants.

     F.   The  shares  of Common Stock and warrants to purchase shares of Common
Stock  issuable  as  provided  in  Recitals  A, C and E above, together with the
shares  of Common Stock issuable upon exercise of such warrants, are hereinafter
collectively referred to as the "Securities".

     G.   The Company deems it necessary and advisable and in the best interests
of  the  Company  and  its  stockholders  to  enter into this Agreement with the
Stockholders and, as a material inducement and consideration to the Stockholders
to  enter  into the Exchange Agreement, and to cause certain of the Stockholders
to  sell  intellectual property to the Company, and/or compromise, cancel and/or
convert  amounts  owed  to  them  by the Company as contemplated by the Exchange
Agreement,  the  Company  has agreed to enter into and execute this Agreement on
the terms and subject to the conditions set forth below.

     NOW,  THEREFORE,  in consideration of the foregoing premises and the mutual
covenants  and  agreements  of  the parties contained herein, the Company hereby
grants  to  each  of  the  Stockholders  certain  rights  with  respect  to  the
registration  under  the Securities Act of the Securities to be acquired by them
pursuant  to  transactions  contemplated  by  the  Exchange  Agreement,  on  the
following terms and subject to the following conditions:

     1.   Registration.
          ------------

          (a)  Within  sixty  (60)  days  after  the  Closing under the Exchange
Agreement,  the Company shall prepare and file or cause to be prepared and filed
with  the Commission a registration statement for the purpose of registering the
resale,  from time to time by the Stockholders participating in the registration
(as  provided  in  subparagraph  1(b)  below)  on  a delayed or continuous basis
pursuant  to  Rule  415  of  the  Securities  Act,  all  of  the Securities (the
"Registration  Statement").  The Registration Statement shall be on Form S-3, or
another  appropriate  form permitting registration of such Securities for resale
by  the  Selling  Stockholders.

          (b)  The  Company  shall  include  among  the  shares  covered  by the
Registration Statement such portion of the Securities as shall be specified in a
written  request given to the Company by one or more of the  Stockholders within
thirty  30  days  after  the  date  of the Closing under the Exchange Agreement.
(individually,  a  "Selling  Stockholder",  and  collectively,  the  "Selling
Stockholders").  Such written request shall include the information specified in
Paragraph  3(b)  (ii)  below  regarding each Selling Stockholder, and such other
information  as  the  Company  may reasonably request.  Each Selling Stockholder
shall  be  named  as a selling security holder in the Registration Statement and
the  related  Prospectus  in


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such  a  manner as to permit such Selling Stockholder to deliver such Prospectus
to purchasers of Securities in accordance with the Securities Act and applicable
state  securities  laws  generally  applicable to all such Selling Stockholders.

          (c)  The  Company  shall  use  reasonable  best  efforts  to cause the
Registration  Statement  to  be  declared  effective under the Securities Act no
later  than the date that is one-hundred and twenty (120) days after the date of
the Closing under the Exchange Agreement, and to keep the Registration Statement
continuously  effective  under  the Securities Act for a period of not less than
one (1) full year from the date on which the Registration Statement first became
effective  under  the  Securities  Act.

          (d)  The Company shall supplement and amend the Registration Statement
if  required  by  the  rules,  regulations  or  instructions  applicable  to the
registration  form  used  by  the  Company  for  such Registration Statement, if
required  by  the Securities Act or, to the extent to which the Company does not
reasonably object, as reasonably requested by the Selling Shareholders.

          (e)  The  Company  shall  use  reasonable  best  efforts to effect the
registration,  qualification  or  compliance  under any applicable securities or
"blue  sky"  laws  of  jurisdictions  within the United States of the Securities
included  in  the  Registration  Statement;  provided, however, that the Company
                                             ------------------
alone  shall  be  entitled  to  determine  the  jurisdictions  in  which  such
registration, qualification or compliance shall be sought, and in no event shall
the  Company be obligated to qualify to do business in any jurisdiction where it
is  not  so  qualified or to take any action that would subject it to tax or the
service  of process (other than process in connection with such registration) in
any  jurisdiction  where  it  is  not  subject  thereto.

          (f)  The Company shall furnish to each Selling Stockholder such number
of  copies of the prospectus contained in the registration statement filed under
the  Securities  Act  (including each preliminary prospectus) in conformity with
the requirements of the Securities Act, and such other documents as such Selling
Stockholders  may  reasonably  request in order to facilitate the disposition of
the  Securities held by them which is covered by the registration statement; and

          (g)  The  Company  shall  notify each Selling Stockholder, at any time
when  a  prospectus is required to be delivered under the Securities Act, of the
happening  of  any event as a result of which the prospectus in the registration
statement, as then in effect, includes an untrue statement of a material fact or
omit  to  state  any material fact required to be stated therein or necessary to
make  the statements therein not misleading, and prepare and furnish to them any
reasonable number of copies of any supplement to or amendment of such prospectus
as  may be necessary so that, as thereafter delivered, such prospectus shall not
include  an untrue statement of a material fact or omit to state a material fact
required  to  be  stated therein or necessary to make the statements therein not
misleading.


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<PAGE>
     2.   Expenses.  The  Company  shall bear all costs and expenses relating to
          ---------
or  incurred by it in connection with the registration  specified in Paragraph 1
above  ("Registration  Expenses"), including without limitation all registration
and  filing  fees,  printing  expense,  fees  and  disbursements  of counsel and
independent  accountants  for  the  Company  and  fees  and expenses incident to
compliance  with state securities or "blue sky" laws, but specifically excluding
any  fees  and  disbursements  of  counsel,  accountants  or other professionals
engaged  by  any Selling Stockholder.  Each Selling Stockholder participating in
such  registration shall be responsible for and bear any underwriters' discounts
and  commissions properly allocable to the Securities included in a registration
statement at the request of a Selling Stockholder hereunder.

     3.   Indemnification.
          ---------------

          (a)  The  Company  shall  indemnify  and  hold harmless, to the extent
permitted by law, each Selling Stockholder any actions, losses, claims, damages,
liabilities  and  expenses  (including  legal fees and other expenses reasonably
incurred  in the investigation and defense thereof) resulting from any untrue or
alleged  untrue statement of a material fact or any omission or alleged omission
of  a material fact in any registration statement, prospectus, offering circular
or  other  document  filed in connection with any such registration, and against
any  violation  by  the Company of the Securities Act or any state securities or
"blue  sky"  law, or any rule or regulation under any of them, applicable to the
Company  in connection with such registration, unless and to the extent that any
such  actions,  claims, losses, damages, liabilities or expenses arise out of or
are  based  upon  any  of  the  written information specifically provided by the
Selling Stockholder for use in such registration statement, prospectus, offering
circular or other document pursuant to subparagraph 3(b) below.

          (b)  In  connection  with any registration in which any of the Selling
Stockholders  is  participating,  each such Selling Stockholder shall furnish to
the Company such information in writing regarding the Selling Stockholder as the
Company  reasonably  requests  for  inclusion  in  the  registration  statement,
prospectus, offering circular and other documents filed in connection therewith,
and  shall  state  that such information is provided specifically for use in the
registration  statement, prospectus, offering circular or other documents.  Each
such  Selling  Stockholder shall also indemnify and hold harmless, to the extent
permitted  by  law,  the  Company,  and  its  directors  and  officers, and each
underwriter of the offering, if any (in a manner reasonably satisfactory in form
and  substance to such underwriter), and each person who controls the Company or
each  such  underwriter  (within the meaning of the Securities Act), against any
actions, losses, claims, damages, liabilities, and expenses (including legal and
other  expenses  reasonably  incurred  in the investigation and defense thereof)
resulting  from any untrue or alleged untrue statement of a material fact or any
omission  or  alleged  omission  of a material fact required to be stated in any
such documents or any supplement or amendment thereto, and against any violation
by  the Company of the Securities Act or any state securities or "blue sky" law,
or  any  rule  or  regulation  under  any  of them, applicable to the Company in
connection  with  such registration, or necessary to make the statements therein
not  misleading,  but  only  to  the


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<PAGE>
extent  that  such  untrue  statement  or omission is made in reliance on and in
conformity with the written information furnished to the Company by such Selling
Stockholder  specifically  for  use  in  any  such  documents; provided that the
indemnity  contained  in  this  Section  3(b) shall not apply to amounts paid in
settlement  of  any  such  actions,  losses,  claims,  damages,  liabilities and
expenses  if  such  settlement  is  effected  without the consent of the Selling
Stockholder,  unless  the  consent  of  such Selling Stockholder is unreasonably
withheld, and provided, further, that in no event shall any indemnity under this
Section  3(b)  exceed the proceeds from the registration received by the Selling
Stockholder.

          (c)  Promptly after receipt by an indemnified party under this Section
3  of  notice  of  the  commencement  of  any action (including any governmental
action),  such  indemnified  party shall, if a claim in respect thereof is to be
made  against  any  indemnifying  party  under  this  Section  3, deliver to the
indemnifying  party  a  written  notice  of  the  commencement  thereof  and the
indemnifying  party  shall  have the right to participate in, and, to the extent
that  the  indemnifying  party  so  desires, jointly with any other indemnifying
party  similarly  noticed,  to  assume the defense thereof with counsel mutually
satisfactory  to  the indemnified party and the indemnifying party(s); provided,
                                                                       ---------
however,  that  an  indemnified  party  shall retain the right to retain its own
-------
counsel,  with the fees and expenses to be paid by the indemnifying party(s), if
representation  of  such  indemnified  party  by  the  counsel  retained  by the
indemnifying  party(s)  would  be  inappropriate  due  to  actual  or  potential
differing  interests  between  such  indemnified  party  and  any other party(s)
represented  by such counsel in such proceeding.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action,
shall  relieve such indemnifying party of any liability to the indemnified party
under  this  Section  3,  but  the  omission  to  deliver  written notice to the
indemnifying  party will not relieve it of any liability that it may have to any
indemnified  party  otherwise  than  under  this  Section  3.

     4.   Miscellaneous.
          -------------

          (a)  Each  of  the parties hereto shall execute and deliver such other
and  further documents and instruments, and take such other and further actions,
as  may  be reasonably requested of them for the implementation and consummation
of  this  Agreement  and  the  transactions  herein  contemplated.

          (b)  This  Agreement shall be binding upon and inure to the benefit of
the  parties  hereto,  and  the  heirs, personal representatives, successors and
assigns  of  all of them, but shall not confer, expressly or by implication, any
rights  or  remedies  upon  any  other  party.

          (c)  This  Agreement  is  made  and shall be governed in all respects,
including  validity,  interpretation  and  effect,  by  the laws of the State of
Delaware.  Should  any  provision of this Agreement be rendered void, invalid or
unenforceable  by  any court for any reason, such invalidity or unenforceability
shall  not  void or render invalid or unenforceable any other provisions of this
Agreement.


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<PAGE>
          (d)  All  notices,  requests  or  demands  and  other  communications
hereunder  must  be  in  writing  and  shall be deemed to have been duly made if
personally  delivered  or  mailed,  postage  prepaid, to the parties as follows:

     If to the Company, to:              InterActive Group, Inc.
                                         _______________________
                                         _______________________
                                         Attn: President

     If to any Stockholder, in care of:  _______________________
                                         _______________________
                                         _______________________

Any  party  hereto  may  change its address by written notice to the other party
given  in  accordance  with  this  subparagraph  4(d).

          (e)  This  Agreement,  together  with  the  Exchange Agreement and the
other  exhibits  attached  thereto,  contain  the  entire  agreement between the
parties  and supersede all prior agreements, understandings and writings between
the  parties  with respect to the subject matter hereof and thereof.  Each party
hereto  acknowledges  that  no  representations,  inducements,  promises  or
agreements,  oral  or  otherwise,  have been made by any party, or anyone acting
with  authority  on  behalf of any party, which are not embodied herein or in an
exhibit  hereto, and that no other agreement, statement or promise may be relied
upon  or  shall be valid or binding.  Neither this Agreement nor any term hereof
may  be changed, waived, discharged or terminated orally.  This Agreement may be
amended  or  any term hereof may be changed, waived, discharged or terminated by
an  agreement  in  writing  signed  by  all  parties  hereto.

          (f)  The  captions  and  headings used herein are for convenience only
and shall not be construed as a part of this Agreement.

          (g)  In  the  event  of any litigation between the parties hereto, the
non-prevailing  party(s)  shall  pay  the  reasonable  expenses,  including  the
attorneys' fees, of the prevailing party(s) in connection therewith.

          (h)  This  Agreement  may  be  executed in counterparts, each of which
shall be deemed an original but all of which taken together shall constitute but
one  and  the  same  document.

     IN  WITNESS  WHEREOF,  the  parties hereto have duly executed and delivered
this Agreement as of the day and year first above written.


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