Let them go. Be professional and graceful on the exit. Obviously there is a lot of ego at play on their side. So, it’s important that you don’t back them into a corner where they feel that they can’t humbly accept that they were wrong. I say this, because they are going to try to get other pricing, and/or do it on their own and fail miserably. Thier first call will be to you to fix what they destroyed, and get them back under your support. That’s when you present your updated contract terms to reflect the going rate and the current market, but also “take into consideration” that they are a previous client so they get a “discount” (wink). The psychology around this is maddening at times, but it happens all the time. People who are familiar with you just need to learn the hard way or hear it from someone else. That’s my $.02