1. The contractor may tender to the owner acceptable substitute security as set forth in section 436.312 with a written request for release of retainage in the amount of the substitute security. The contractor shall thereupon either:

(1) Be entitled to receive cash payment of retainage pursuant to this section; or

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(2) Not be subject to the withholding of retainage, in either case, to the extent of the security tendered, provided that the contractor is not in default of its agreement with the owner.

2. If the tender described in subsection 1 of this section is made after retainage has been withheld, the owner shall, within five working days after receipt of the tender, pay to the contractor the withheld retainage to the extent of the substitute security. If the tender described in subsection 1 of this section is made before retainage has been withheld, the owner shall, to the extent of the substitute security, refrain from withholding any retainage from the future payments.