TiVo

(TIVO) - Get TiVo Corp. Report

slashed the exercise price of a series of warrants held by

AOL Time Warner

(AOL)

as part of an investment agreement reached last summer.

TheStreet Recommends

Last June, the company that was then

America Online

invested about $200 million and acquired a 30% interest in TiVo, a provider of technology that allows users to digitally record television shows, including warrants to purchase about 2.6 million TiVo common shares.

Today, TiVo said it will reduce the exercise price of a warrant held by AOL, allowing the Internet and media company to purchase 2.3 million TiVo common shares, to $7.29 a share from $23.11. TiVo also cut the exercise price of a warrant to purchase an additional 295,428 shares to $7.29 from $30.

Shares of TiVo were lately up 56 cents, or 8.2%, to $7.50 in

Nasdaq

trading. AOL gained 55 cents, or 1%, to $54.86 on the Big Board. TiVo's 52-week high is $49.13.

Additionally, TiVo, which is based in San Jose, Calif., said it plans to spend $21.5 million to promote its service through AOL's online, print and television properties. TiVo also said it plans to use as working capital $43.5 million that AOL provided through the earlier investment in the company.