How does he intend to use the guitar and amp? For home or gig? What genre of music does he play? All this will determine the type of axe you are getting.
I suppose with $400, you can get a decent entry level guitar for between $180 and $250 (from Strat and Tele to Les Paul and SG copies at Davis), and a 15W amp for around $150 - $200 from most established brands.
Best way is to go down to Swee Lee or Davis or City Music or Ranking Sports or Luther and try the guitars and amp within your budget.
On the other hand, you can always get second hand some of the better guitars from Luther Classifieds or Yahoo auctions. For amps it is not so critical at this point and you get buy a decent new amp at a reasonable price. But you got to know your guitars when buying second hand. Best that you get someone who knows how to assess the quality of the guitar.
My advice is to spent about $250 for the guitar and $150 for the amp.