Welcome to PC, and sorry you're in this situation. I tend to agree with Leed. I have. Never been in a relationship with someone who has cheated and then worked it out and stuck around, but people do make that choice. But it doesn't sound like your husband is willing to change much. I mean, it's pretty ballsy of him to want to keep this 'friend' in his life and assume that you will put up with it. I guess you need to decide what's important to you with your marriage the way it is now (not how it was or could be) and what you need to feel happy and sane. It's not just about him.

Hope you find a way through this.