Regarding a model agency using YOUR photographs on their site, portfolios, etc.

As the title suggests,

I have a friend (actually a few) who are apart of a modeling agency. I won't say who unless people ask (I'm not really sure if they're legit or not so I can't just play the blame game.) But i'm fine with doing photo shoots for more experience for myself and the model, but this friend that is apart of this one is saying they want images with no watermarks which kind of sucks cause they're giving me no exposure. The kicker is these people want to use my photographs in their portfolios that THEY send to clients. IF they use my photographs for actual prints in a portfolio (i send 72 dpi 800x800 images) they could possibly make them small enough to not make all shitty looking, but they're making money off the photographs I took.

I was told by my friend that they charge HIM 600$ to use their in-house photographer, I don't really understand why they're going to charge someone that works for them for photographs so they can make more money off of him. Seems pretty shady to me.

I'm not really sure what I'm expecting to hear back from anyone but I just want to know what your guys / girls take is on this.

Should I ask for compensation? Should I send my friend blatant watermarked images just for the hell of it?

I'm not really sure what I should do besides just stop taking photographs for my friends without making them pay for digital copies which I do not really want to do and be that guy.