Sex harass follow-up

Let me first thank you all for your helpful and prompt responses to my previous postings. We do have legal counsel working on the situation right now however I'd like to get the perspective of other human resource managers for future reference. We have made an offer to settle with this employee however she has not accepted it. Her second letter included in much more detail the situations with her supervisor including quotes from him about her breasts, weight and her attempts to resolve the situation that were ignored by him. This supervisor is still employed at the company and I am concerned of that this may be happening to other people and come back to bite us later. Any comments on how to deal with the situation? He seems to have one female assistant that he gets along with quite well, almost too well??? who knows? I have my fingers crossed.:(
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