<PAGE>
 
                                                                     EXHIBIT 4.2

                           FIRST AMENDED AND RESTATED
                         REGISTRATION RIGHTS AGREEMENT

     AGREEMENT, dated as of the 5th day of May, 1998, among each of the
Investors listed on Schedule A hereto (a "Holder" or the "Holders") and Carver
Corporation, a Washington corporation, having its principal place of business at
15300 Woodinville-Redmond Road N.E., Woodinville, Washington 98036 (the
"Company").

     WHEREAS, the Holders have purchased from the Company an aggregate of up to
1,411,764 shares of Series A Cumulative Convertible Preferred Stock of the
Company, $.01 par value (the "Preferred Stock") and received warrants (the
"Warrants") to purchase up to 300,000 shares (the "Warrant Shares") of common
stock, $.01 par value, of the Company ("Common Stock") upon the terms set forth
in the Series A Preferred Stock Purchase Agreement by and among the Company and
the Holders dated June 12, 1996 (the "Purchase Contract");

     WHEREAS, simultaneous with the execution and delivery of this Amended
Agreement, one such Holder, Renwick Special Situations Fund, L.P. ("Renwick"),
is purchasing from the Company an aggregate of up to 3,000,000 shares of Common
Stock (the "Subscription Shares") upon the terms set forth in the Subscription
Agreement by and between the Company and Renwick dated May 5, 1998 (the
"Subscription Agreement");

     WHEREAS, the Company desires to grant to the Holders the registration
rights set forth herein with respect to (i) the shares of Common Stock to be
issued to the Holders upon the conversion of the Preferred Stock or exercise of
the Warrants; and the Subscription Shares; and

     WHEREAS, the Company and the Holders desire to amend and restate the
Registration Rights Agreement by and among them dated June 12, 1996 as set forth
herein.
     
     NOW, THEREFORE, the parties heRETO MUTUALLY AGREE AS FOLLOWS:

     1.   REGISTRATION RIGHTS.
 
          (a)  Registration Under the Securities Act of 1933.  None of the
Warrants, the Warrant Shares, the Preferred Stock, the Common Stock to be issued
upon conversion of the shares of Preferred Stock (the "Conversion Shares") or
the Subscription Shares have been registered for purposes of public distribution
under the Securities Act of 1933, as amended (the "Act").

          (b)  Registrable Securities.  As used herein, the term "Registrable
Security" means the Warrant Shares, the Conversion Shares, the Subscription
Shares and any shares of Common Stock issued upon any stock split or stock
dividend in respect of such Warrant, Conversion and Subscription Shares;
provided, however, that with respect to any particular Registrable Security,
such security shall cease to be a Registrable Security when, as of the date of
determination, (i) it has been effectively registered under the Act and disposed
of pursuant thereto, (ii) registration under the Act is no longer required for
subsequent public distribution of such security, (iii) it has ceased to be
outstanding or (iv) it is no longer beneficially owned by a Holder or a
permitted transferee of the rights of a Holder pursuant to Section 9 of this
Agreement.  The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
In the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made in the definition of "Registrable Security" as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Section 1.
 
          (c)  Piggyback Registration.
 
               (i)  If, at any time during the ten years following the date of
this Agreement, the Company proposes to prepare and file one or more
registration statements under the Act to register any shares of Common Stock on
a 
<PAGE>
 
registration form that may be used for registration of Registrable Shares (in
any such case, other than in connection with a merger, acquisition or pursuant
to Form S-8 or successor form) (for purposes of this Section 1, collectively,
the "Registration Statement"), it will give written notice of its intention to
do so by registered mail ("Notice"), at least twenty (20) days prior to the
filing of each such Registration Statement, to each Holder. Upon the written
request of any Holder (a "Requesting Holder"), made within twenty (20) days
after receipt of the Notice, that the Company include any of the Requesting
Holder's Registrable Securities in the proposed Registration Statement, the
Company shall use its reasonable best efforts to effect the registration under
the Act of the Registrable Securities which it has been so requested to register
("Piggyback Registration"), at the Company's sole cost and expense and at no
cost or expense to the Requesting Holder provided, however, that if, in the
written opinion of the Company's managing underwriter, if any, for such
offering, the inclusion of all or a portion of the Registrable Securities
requested to be registered, when added to the securities being registered by the
Company or the selling shareholder(s), will exceed the maximum amount of the
Company's securities which can be marketed (i) at a price reasonably related to
their then current market value, or (ii) without otherwise materially adversely
affecting the entire offering, then the Company may exclude from such offering
all or a portion of the Registrable Securities which it has been requested to
register.
 
               (ii)  If securities are proposed to be offered for sale pursuant
to such Registration Statement by other security holders of the Company and the
total number of securities to be offered by the Requesting Holder and such other
selling security holders is required to be reduced pursuant to a request from
the managing underwriter (which request shall be made only for the reasons and
in the manner set forth above) the aggregate number of Registrable Securities to
be offered by the Requesting Holder pursuant to such Registration Statement
shall equal the number which bears the same ratio to the maximum number of
securities that the underwriter believes may be included for all the selling
security holders (including the Requesting Holder) as the original number of
Registrable Securities proposed to be sold by the Requesting Holder bears to the
total original number of securities proposed to be offered by the Requesting
Holder and the other selling security holders.

               (iii)  Notwithstanding the provisions of this Section 1(c), the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 1(c) (irrespective of whether any written
request for inclusion of such securities shall have already been made) to elect
not to file any such proposed Registration Statement, or to withdraw the same
after the filing but prior to the effective date thereof.
 
          (d)  Demand Registration.  At any time during a period of five years
from the date of this Agreement, Holders owning more than 50% of the aggregate
Registrable Securities then outstanding shall have the right (which right is in
addition to the piggyback registration rights provided for under Section 1(c)
hereof), exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission") on no more than two occasions, according to the
expense - sharing arrangements described at Section 2(b) below, a Registration
Statement and such other documents, including a prospectus, as may be necessary
(in the opinion of both counsel for the Company and counsel for such Holders),
in order to comply with the provisions of the Act, so as to permit a public
offering and sale of the Registrable Securities by the Holder provided, however,
that during the one year period ending on the first anniversary of the date
hereof the Company shall not be required to register pursuant to this Section
1(d) the Subscription Shares and any shares of Common Stock issued upon any
stock split or stock dividend in respect thereof unless Holders owning at least
two-thirds of such shares have given written notice to the Company of demand
pursuant to this Section 1(d) in which case, notwithstanding the expense-sharing
arrangements described in Section 2(b), such electing Holders shall bear their
pro rata share of all costs and expenses of such registration, such amount to be
determined based on the percentage which the market value as of the date of
filing of the registration statement of the Subscription Shares so included
bears to the aggregate market value  as of the date of filing of the
registration statement of all securities covered by such registration statement;
provided, further, that the Company shall not be required to effect a
Registration pursuant to this Section 1(d) unless at least 500,000 shares of the
Registrable Securities are proposed to be sold in such registration (as adjusted
for any stock split, stock dividend or similar change in the Common Stock).  The
Company shall not be required to maintain the effectiveness of any such
registration for greater than six months.  The form on which such registration
shall be filed shall be determined by the Company from among the forms then
available to it under the Act for such registration.

          (e)  In addition to the rights set forth in Section 1(c) above, at any
time prior to the tenth anniversary of the date of this Agreement and subject to
the limitation described in Section 1(b) with respect to the Subscription
Shares, 
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one or more Holders holding at least 50% of the Registrable Securities then
outstanding ("Initiating Holders") may make written demand for registration of
Registrable Shares under the Securities Act on Form S-3 (an "S-3 Demand Notice")
on an unlimited number of occasions, provided that the Registrable Shares
requested to be registered in any such Form S-3 registration statement have an
aggregate fair market value at the date of delivery to the Company of the S-3
Demand Notice of at least $250,000 and provided, further, that the Company is
then eligible to use Form S-3 for registration and public sale of the
Registrable Securities.

          (f)  Notwithstanding the foregoing, the Company may delay filing a
registration statement and may withhold efforts to cause the registration
statement to become or remain effective, if the Company determines in good faith
that such registration might (i) interfere with or affect the negotiation or
completion of any transaction that is being contemplated by the Company at the
time the right to delay is exercised, or (ii) involve initial or continuing
disclosure obligations that might not be in the best interest of the Company's
shareholders.  Notwithstanding the foregoing, the Company shall not be entitled
to exercise its right to defer filing or effectiveness of or to update a
registration pursuant to a Demand Registration Request for more than one hundred
eighty (180) consecutive days.

     2.   COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.  The Company
covenants and agrees as follows:

          (a)  In connection with any registration under Section 1(d) hereof,
the Company shall use its best efforts to file the Registration Statement as
expeditiously as possible, but in any event no later than forty-five (45) days
following receipt of any demand therefor, shall use its best efforts to have any
such Registration Statement declared effective at the earliest possible time,
and shall furnish each holder of Registrable Securities such number of
prospectuses as shall reasonably be requested.

          (b)  Subject to the proviso in Section 1(d) above, the Company shall
pay all costs, fees and expenses in connection with all Registration Statements
filed pursuant to Sections 1(c), 1(d) and 1(e) hereof including, without
limitation, the Company's legal and accounting fees, printing expenses, and blue
sky fees and expenses; provided, however, that the expenses paid by the Company
in connection with the exercise of rights to registration pursuant to Section
1(e) above shall be limited to those usual and customary expenses associated
with a non-underwritten offering.  However, each Holder shall be solely
responsible for the fees of any counsel retained by him or her in connection
with such registration and any transfer taxes or underwriting discounts or
commissions applicable to the Registrable Securities sold by him or her pursuant
to Section 1(c) hereof.

          (c)  The Company shall indemnify and hold harmless each Holder and
each underwriter, within the meaning of the Act, who may purchase from or sell
for the Holder, any Registrable Securities, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in the Registration Statement, any other registration statement
filed by the Company under the Act, any post-effective amendment to such
registration statements, or any prospectus included therein required to be filed
or furnished by reason of this Agreement or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or alleged untrue statement or omission or alleged omission based upon
information furnished or required to be furnished in writing to the Company by a
Holder or underwriter expressly for use therein; which indemnification shall
include each person, if any, who controls any such underwriter within the
meaning of the Act and each officer, director, employee and agent of such
underwriter. The Holder and any such underwriter and other person, shall be
obligated to indemnify the Company, its directors, each officer signing the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any registration
statement or any prospectus required to be filed or furnished by reason of this
Agreement or caused by any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or alleged untrue statement or omission based upon information
furnished in writing to the Company by the Holder or underwriter or other person
expressly for use therein.
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          (d)  If for any reason the indemnification provided for in the
preceding subparagraph is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.

          (e)  Nothing contained in this Agreement shall be construed as
requiring the Holder to exercise the Warrants or convert the Preferred Stock
prior to the initial filing of any registration statement or the effectiveness
thereof.

          (f)  If the Company shall fail to comply with the provisions of this
Agreement, the Company shall, in addition to any other equitable or other relief
available to the holders of Registrable Securities, be liable for any or all
incidental, special and consequential damages sustained by the holders of
Registrable Securities, requesting registration of their Registrable Securities.

          (g)  Except as set forth in Section 2(j), the Company shall not permit
the inclusion of any securities other than the Registrable Securities to be
included in any Registration Statement filed pursuant to Section 1(d) hereof, or
permit any other registration statement to be or remain effective during the
effectiveness of a Registration Statement filed pursuant to Section l(d) hereof,
without the prior written consent of the holders of a majority of the
Registrable Securities held by Holders who initiated the Demand Registration
Request, which consent shall not be unreasonably withheld.

          (h)  The Company shall deliver promptly to the Holder of Registrable
Securities participating in the offering in which the Holder's shares are being
registered pursuant to Section 1(c) or 1(d) hereof and requesting the
correspondence and memoranda described in this Section 2(i) and to the managing
underwriter, if any, copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the Registration Statement and
permit the Holder and underwriters to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the
Registration Statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc.  Such investigation shall include access to books, records and
properties and opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable extent and at such
reasonable times and as often as the Holder of Registrable Securities or
underwriter shall reasonably request.

          (i)  Upon the written request therefor by the Holder, the Company
shall include in the Registration Statement covering any of the Registrable
Securities any other shares of Common Stock held by the Holder as of the date of
filing of such Registration Statement, provided that such Holder pays the
incremental costs associated with registration of such additional shares.

     3.   ADDITIONAL TERMS.  The following provisions shall be applicable to
any Registration Statement filed pursuant to Section 1 of this Agreement:

          (a)  The Company will use its reasonable best efforts to cause the
Registration Statement to become effective as promptly as possible and, if any
stop order shall be issued by the Commission in connection therewith, to use its
reasonable efforts to obtain the removal of such order.  Following the effective
date of the Registration Statement, the Company shall, upon the request of the
Holder, forthwith supply such reasonable number of copies of the Registration
Statement, preliminary prospectus and prospectus meeting the requirements of the
Act, and other documents necessary or incidental to a public offering, as shall
be reasonably requested by the Holder to permit the Holder to make a public
distribution of his or her Registrable Securities.  The Company will use its
reasonable efforts to qualify the Registrable Securities for sale in such states
as the Holder of Registrable Securities shall reasonably request, provided that
no such qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to service of general process or to
taxation or qualification as a foreign corporation doing business in such
jurisdiction.  The obligations of the Company hereunder with respect to the
Holder's Registrable Securities are expressly conditioned on the 
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Holder's furnishing to the Company such appropriate information concerning the
Holder, the Holder's Registrable Securities and the terms of the Holder's
offering of such Registrable Securities as the Company may reasonably request.

          (b)  Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Holder shall impose upon the Holder any obligation to sell his or her
Registrable Securities.

          (c)  The Holder, upon receipt of notice from the Company that an event
has occurred which requires a post-effective amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of his or her Registrable Securities until the Holder
receives a copy of a supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such notice.

          (d)  If the Company fails to keep the Registration Statement
continuously effective, for the time period required by Section 1(d) hereof,
then the Company shall, promptly upon the request of the Holders of more than
50% of the then-unsold Registrable Securities, update the Registration Statement
or file a new registration statement covering the Registrable Securities
remaining unsold, subject to the terms and provisions hereof.

     4.   AMENDMENT OR WAIVER.  The provisions of this Agreement may be
amended at any time and from time to time, and particular provisions of this
Agreement may be waived, with an agreement or consent in writing, executed in
one or more counterparts, signed by the Company and by Holders holding not less
than a majority of the Registrable Securities outstanding and held by Holders as
of the date of such amendment or waiver.  Any amendment or waiver effected in
accordance with this paragraph shall be binding on the Company and all Holders.

      5.   ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof, including the Registration Rights
Agreement dated June 12, 1996 among the Company and the Holders.

      6.   EXECUTION IN COUNTERPARTS.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

      7.   NOTICES.  All notices, requests, demands or other communications
required by or otherwise given with respect to this Agreement shall be in
writing and shall be deemed to have been duly given to any party when delivered
personally (by courier service or otherwise), four days after being mailed by
United States first-class mail, postage prepaid and return receipt requested, or
when delivered by facsimile (if a confirming copy is sent by mail as aforesaid),
in each case to the applicable addresses set forth below:

     If to the Holder, to his or her address set forth on the signature page of
this Agreement.
<PAGE>
 
     If to the Company, to the address set forth on the first page of this
Agreement.

     8.   BINDING EFFECT: BENEFITS.  A Holder may assign his or her rights
hereunder to a transferee or assignee of at least 50,000 Registrable Securities,
as adjusted by any stock split, stock dividend or similar change in the Common
Stock, provided in any event that the Company is given written notice at the
time of or within a reasonable time after said transfer, stating the name and
address of said transferee or assignee and provided, further, that the
transferee or assignee agrees in writing to abide by and assume each and every
duty and obligation of a Holder pursuant to this Agreement.  This Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
Nothing herein contained, express or implied, is intended to confer upon any
person other than the parties hereto and their respective heirs, legal
representatives, successors and such permitted assigns, any rights or remedies
under or by reason of this Agreement.

     9.   HEADINGS.  The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.

     10.  SEVERABILITY.  Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

     11.  GOVERNING LAW.  This Agreement shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State.

       IN WITNESS WHEREOF, this Registration Rights Agreement has been executed
and delivered by the parties hereto as of the date first above written.
 
 
                                       CARVER CORPORATION                    
                                                                             
                                       By:  /s/ John P. World                 
                                            ________________________________ 
                                            Name:  John P. World             
                                            Title:  Executive Vice President 
                                                    and Gen. Mgr.            
                                                                             
                                       INVESTORS:                            
                                                                             
                                       RENWICK SPECIAL SITUATIONS FUND, L.P. 
                                       900 Third Avenue, 27th Floor          
                                       New York, New York  10022             
                                                                             
                                       By:  /s/ Raj A. Bhatia 
                                            _______________________          
                                            Name:  Raj A. Bhatia             
                                            Title:  General Partner          
                                                                             
                                       RENWICK ALPHA FUND, L.P.              
                                       900 Third Avenue, 27th Floor          
                                       New York, New York  10022             
                                                                             
                                       By:  /s/ Raj A. Bhatia
                                            _______________________          
                                            Name:  Raj A. Bhatia             
                                            Title:  General Partner          
<PAGE>
 
                                       RENWICK CAPITAL MANAGEMENT, INC.
                                       900 Third Avenue, 27th Floor    
                                       New York, New York  10022       
                                                                       
                                       By:  /s/ James R. McCullough        
                                            __________________________ 
                                            Name:  James R. McCullough 
                                            Title:  Co-President