Unless you are your own broker, you should take this question to your broker or managing broker. They will tell you the office protocol for handling such matters.
As pointed out by Richard (below) an agent solicitation of a property listed exclusively for sale (with a sales proposition) constitutes a violation of the Code of Ethics (article 16). Could be the other agent needs to be "reminded" of this fact and how our local "boards" don't take kindly to this type of behavior. On the other hand, this situation begs the question of whether or not the other agent knew or knows of your listing. Their involvement may simply be a mistake.
Of course your options are: allow cancellation of the listing agreement with no compensation, cancel with compensation, match the price of the other agent, or negotiate and amend your existing agreement.
Unless your listing agreement with the Seller allows for unilateral cancellation, take a moment to think all scenarios through. Hopefully you know what services have been promised by the other agent and can therefore "strategize" a successful outcome.
Best of Luck!