The state hereby pledges to and agrees with the holders of any bonds or other obligations issued under the Drinking Water State Revolving Loan Fund Act and with those parties that enter into contracts or agreements with the department or with the authority pursuant to the provisions of that act, that the state shall not limit, alter, restrict or impair any rights vested in the authority to fulfill the terms of agreements made with the holders of bonds or other obligations issued pursuant to the Drinking Water State Revolving Loan Fund Act and with the parties who may enter into contracts with a local authority, the department or the authority pursuant to the Drinking Water State Revolving Loan Fund Act, and that the state shall not limit, alter, restrict or impair the rights vested in a local authority or in the department or the authority to fulfill the terms of contracts made with the department or the authority and with parties who enter into contracts with such local authorities. The state further agrees that it shall not in any way impair the rights or remedies of the holders of such bonds or other obligations of such parties until such bonds and other obligations, together with interest thereon, with interest on any unpaid installment of interest and all costs and expense in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged and such contracts are fully performed on the part of the authority, the department or the local authorities. Nothing in this subsection precludes such limitation or alteration if and when adequate provision is made by law for the protection of the holders of bonds or other obligations issued by the authority or those entering into such contracts with the authority, or the authority or the department under any contract with a local authority. The authority or the department may include this pledge and undertaking for the state in such bonds or other obligations and in such contracts.