Legally, your friend is supposed to surrender it to the police.
If he were to quietly drive it out of state and put it in storage, he can keep it until he moves someplace where it's legal for him to possess. If he's got no place to keep it out of state, he can do one of two things.
1) Keep it well hidden until he can someday move, although this is against California state law.
2) Drive it out of California and sell it to an FFL dealer. If he wants to ship it to an out of state FFL for sale, he'd legally have to go through a Cali Assault Weapons FFL (there's a special license for them), and since it's not legally registered, that FFL would end up having to report it and it would most likely be confiscated. Driving your own personal property out of state isn't illegal, and the sale while out of state would be legal (but only to an FFL licensee).
Once it's out of state, your friend is no longer breaking California state law - just be sure he doesn't break any more laws in the sale, if he can help it.