I would not terminate the sprint in this situation. Terminating a sprint is a very rare occurrence, and only when the vast majority of the sprint work is of zero value going forward. For instance, if a company gets bought out by another company, or the company does a re-org, etc -- but again... only if the value of the vast majority of the sprint work is no longer of any value whatsoever.
Understanding that I cannot see your full context from far away, and that I'm only going on what you told me, I would just have the person fix the bug ASAP. In terms of deploying the other functionality -- that's an organizational decision. My experience is that it's not usually a good idea to deploy new functionality with a severe fix, as it could cause confusion and possibly introduce more bugs/risk than is necessary.
As for how to account for this situation from a Scrum perspective, here is one way to deal with a hot fix and other bug/production issues: http://www.scrumcrazy.com/bugs