<PAGE>

                                                                   EXHIBIT 10.40

                                 FIRST AMENDMENT TO REVOLVING CREDIT AND TERM
                                 --------------------------------------------
LOAN AGREEMENT
--------------


     This First Amendment to Revolving Credit and Term Loan Agreement (the
"Amendment") is made as of the 30th day of March, 2000 by and among

     MFIC Corporation (the "Borrower"), a Delaware corporation with its
     principal executive offices at 30 Ossipee Road, Newton, Massachusetts
     02464; and

     National Bank of Canada, a Canadian chartered bank (the "Lender") with a
     place of business at One Federal Street, Boston, Massachusetts 02110;

in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

                                 W I T N E S S E T H:

     WHEREAS, the Borrower and the Lender entered into a certain Revolving
Credit and Term Loan Agreement dated as of February 28, 2000 (the "Loan
Agreement"); and

     WHEREAS, the Borrower and the Lender desire to modify and amend the Loan
Agreement as provided herein.

     NOW, THEREFORE, it is hereby agreed as follows:

     1.  Definitions.  All capitalized terms used herein and not otherwise
         defined shall have the same meanings herein as in the Loan Agreement.

     2.  Amendments to Section 8.

         (1) Section 8.1 of the Loan Agreement (Consolidated Tangible Net Worth)
             is hereby amended by deleting the table therefrom and substituting
             the following table in its stead:

<TABLE>
<CAPTION>

Fiscal 2000                          Fiscal 2001                        Fiscal 2002
------------------------------------------------------------------------------------------------------

Quarter End           $ Amount       Quarter End       $  Amount        Quarter End       $ Amount
------------------------------------------------------------------------------------------------------
<S>                 <C>            <C>              <C>               <C>              <C>

3/31/00              2,400,000          3/31/01         2,950,000          3/31/02        3,500,000
------------------------------------------------------------------------------------------------------

6/30/00              2,500,000          6/30/01         3,050,000          6/30/02        3,600,000
------------------------------------------------------------------------------------------------------

9/30/00              2,600,000          9/30/01         3,150,000          9/30/02        3,700,000
------------------------------------------------------------------------------------------------------

12/31/00             2,850,000         12/31/01         3,400,000         12/31/02        3,950,000
------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

         (2) Section 8.2 of the Loan Agreement (Liabilities to Worth
             (Leverage) Ratio) is hereby amended by deleting the table
             therefrom and substituting the following table in its stead:

<TABLE>
<CAPTION>

Fiscal 2000                         Fiscal 2001                       Fiscal 2002
---------------------------------------------------------------------------------------------------

Quarter End            Ratio          Quarter           Ratio         Quarter End        Ratio
                                        End
---------------------------------------------------------------------------------------------------
<S>                 <C>           <C>              <C>              <C>              <C>

3/31/00            2.25 : 1.0          3/31/01       2.00 : 1.0          3/31/02      1.75 : 1.0
---------------------------------------------------------------------------------------------------

6/30/00            2.25 : 1.0          6/30/01       2.00 : 1.0          6/30/02      1.75 : 1.0
---------------------------------------------------------------------------------------------------

9/30/00            2.25 : 1.0          9/30/01       2.00 : 1.0          9/30/02      1.75 : 1.0
---------------------------------------------------------------------------------------------------

12/31/00           2.00 : 1.0         12/31/01       1.75 : 1.0         12/31/02      1.50 : 1.0
---------------------------------------------------------------------------------------------------
</TABLE>


         (3) Section 8.4 of the Loan Agreement (Minimum Debt Service) is
             hereby amended by deleting the table therefrom and substituting
             the following table in its stead:

<TABLE>
<CAPTION>

Fiscal 2000                              Fiscal 2001                    Fiscal 2002
---------------------------------------------------------------------------------------------------

Quarter End               Ratio            Quarter           Ratio        Quarter         Ratio
                                             End                            End
---------------------------------------------------------------------------------------------------
<S>                  <C>               <C>               <C>            <C>           <C>

                                           3/31/01       1.50 : 1.0       3/31/02     1.75 : 1.0
---------------------------------------------------------------------------------------------------

                                           6/30/01       1.50 : 1.0       6/30/02     1.75 : 1.0
---------------------------------------------------------------------------------------------------

                                           9/30/01       1.50 : 1.0       9/30/02     1.75 : 1.0
---------------------------------------------------------------------------------------------------

12/31/00               1.50 : 1.0          12/31/01        1.75: 1.0      12/31/02     2.00 : 1.0
---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

     3.  Conditions to Effectiveness. This Amendment shall not be effective
         until each of the following conditions precedent have been fulfilled
         to the satisfaction of the Lender:

         (1) This Amendment shall have been duly executed and delivered by the
             respective parties hereto and, shall be in full force and effect
             and shall be in form and substance satisfactory to the Lender.

         (2) All action on the part of the Borrower necessary for the valid
             execution, delivery and performance by the Borrower of this
             Amendment shall have been duly and effectively taken and evidence
             thereof satisfactory to the Lender shall have been provided to the
             Lender. The Lender shall have received from the Borrower true
             copies of the resolutions adopted by its board of directors
             authorizing the transactions described herein, certified by the
             Borrower's secretary to be true and complete.

         (3) The Borrower shall have paid an amendment fee to the Lender in the
             amount of Ten Thousand and 00/100 ($10,000.00) Dollars.

         (4) The Borrower shall have paid to the Lender all fees and expenses
             then due and owing pursuant to the Agreement, including, without
             limitation, the Lender's attorneys' fees and expenses.

         (5) No Default or Event of Default shall have occurred and be
             continuing.

         (6) The Borrower shall have provided such additional instruments and
             documents to the Lender as the Lender and the Lender's counsel may
             have reasonably requested.

     4.  Ratification of Loan Documents. Except as provided herein, all terms
         and conditions of the Loan Agreement and the other Loan Documents
         remain in full force and effect. The Borrower hereby ratifies,
         confirms, and reaffirms all representations, warranties, and covenants
         contained therein and acknowledges and agrees that the Liabilities,
         are and continue to be secured by the Collateral. The Borrower further
         acknowledges and agrees that Borrower does not have any offsets,
         defenses, or counterclaims against the Lender thereunder, and to the
         extent that any such offsets, defenses, or counterclaims may exist, the
         Borrower hereby waives and releases the Lender therefrom.

      5. Miscellaneous.

         (1) This Amendment may be executed in several counterparts and by each
             party on a separate counterpart, each of which when so executed and
<PAGE>

             delivered shall be an original, and all of which together shall
             constitute one instrument.

         (2) This Amendment expresses the entire understanding of the parties
             with respect to the transactions contemplated hereby. No prior
             negotiations or discussions shall limit, modify, or otherwise
             affect the provisions hereof.

     IN WITNESS WHEREOF, the undersigned have hereunto executed this Amendment
as a sealed instrument as of the date first above written.

                              MFIC CORPORATION

                              By: /s/ IRWIN J. GRUVERMAN
                                  -------------------------
                              Name: Irwin J. Gruverman
                              Title: CEO

                              NATIONAL BANK OF CANADA,
                              a Canadian Chartered Bank

                              By: /s/ A. KEITH BROYLES
                                  -------------------------
                              Name: A. Keith Broyles
                              Title: Vice President

                              By: /s/ LEONARD J. PELLECCHIA
                                  -------------------------
                              Name: Leonard J. Pellecchia
                              Title: Vice President