At 10 years old your stepson is old enough to realize when you and your husband are having a serious talk with him. Explain that this is about his future and your son's future. Tell him that in the future he will realize how he treated your son and he will wish he hadn't done the things he did. It is a fine balance between making him realize that he can't continue to hurt your son and loading him with guilt. The idea is for him to grow up excusing himself because he was just a child. Also tell him that your son can forgive him because he too will understand that your stepson was just a child.
Be serious enough that he will not want to go through another talk like that. Tell him that adults go to prison for hurting children. And tell him what a prison is. Tell him he can't be the kind of person who hurts people because he is getting older and he will be old enough to be locked away. Remember that the idea is to make him change his behavior, not to make him feel like "I'm no good ."
I agree that counseling is needed to find out the reasons for his behavior.