Hoku Scientific Inc. said contractor JH Kelly LLC has agreed to resume construction of Hoku's polysilicon production plant in Idaho.

Hoku said it has entered into a change order agreement, under which it will pay $5 million of past amount due to privately held JH Kelly, of about $12 million owed to the contractor.

Kelly agreed to delay foreclosing on the $12 million lien until after Dec. 1, Hoku said, adding that if it makes the payment by that date, Hoku will have until Jan. 14 to pay the balance.

"Kelly also agreed to waive certain interest and other fees and charges that may be incurred as a result of the past-due amounts," Hoku said in a statement Tuesday.

The company also said Kelly reaffirmed its commitment to meet the project's key schedule dates if work resumes in October.

In July, Hoku initiated a slowdown of construction and procurement activities at the facility in Pocatello to preserve cash while it sought additional capital. The company also said at the time that it was exploring sale of its assets as it was struggling to raise capital for the plant, estimated to cost $390 million to build.

Hoku said JH Kelly subsequently filed a lien claiming past-due accounts payable of approximately $12 million.

Hoku Scientific continues to struggle financially, having reported losses in 10 of the past 11 quarters. The Honolulu-based clean-energies technology company reported a $904,000 loss for the April-to-June quarter, far outstripping its $74,000 in revenue.

Shares of the company closed down 4 cents at $2.29 yesterday on the Nasdaq stock market.