Blackwater, recently renamed Xe, issued a statement Tuesday, saying it would respond "to the anonymous unsubstantiated and offensive assertions put forward by the plaintiffs, " in a brief to be filed August 17.

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Losing the contract will be a huge blow to Blackwater, which was renamed Xe last month.

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"I urge you not to enter into further contracts with Xe and to immediately review any existing contracts, " the letter said, according to a copy provided to CNN.

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