I know this is a little huffy but, what a conniving witch! You should be worried because you know what, it takes two. I am sitting here and getting mad for you because that is just ridiculous. I'd tell him how I felt, and I would tell him I was no longer comfortable with him having her and I do say her SPECIFICALLY for a friend. If he has another female friend that doesn't do that then I would compare and explain. I though would guarantee despite how much I cared because I have been in this situation myself, either he quit or you quit because I had to do it. Keep calm of course, maintain composure but don't be idle. If she thinks you're just going to sit back without any real complaints then she will keep going and he needs to know just how much you don't like it. A woman's gut is her intuition and it's kind of a fight or flight reflex kicking in because you are feeling the threat that is definitely there. I hate to be negative but I read your post and it made me fume for you.
“I was never really insane except upon occasions when my heart was touched.” ― Edgar Allan Poe
Wish for a pile of shit to turn into gold hard enough and guess what? It's still a heaping pile of shit.