EXHIBIT 10.16

                     SEVERANCE AGREEMENT AND MUTUAL RELEASE
                              OF CHARLES V. MIHAYLO



         This Severance  Agreement and Mutual Release (this "Agreement") is made
and entered into by and between CHARLES V. MIHAYLO  (hereinafter  referred to as
"Employee") and MICROTEST,  INC.  (hereinafter referred to collectively with all
of its subsidiaries (where appropriate) as the "Company").

         WHEREAS,  the parties have mutually agreed that is in their  respective
best interests to bring their employment relationship to an amicable conclusion,
effective immediately.

         NOW, THEREFORE,  in consideration of the acts, payments,  covenants and
mutual agreements herein described and agreed to be performed,  Employee and the
Company agree as follows:

         1. TERMINATION OF EMPLOYMENT.  Employee hereby resigns his positions as
President  and Chief  Operating  Officer of the  Company  and all  subsidiaries,
effective December 4, 1998.

         2. CONSULTING  SERVICES.  From time to time upon the reasonable request
of the Chief Executive Officer, Employee agrees to render consulting services to
the Company for the period from December 4, 1998 through July 31, 1999. However,
the  Employee  shall not have to consult for more than 10 hours in any one month
and consulting  services shall be rendered at reasonable,  mutually  agreed upon
times.

         3. PAYMENTS.  The Company shall pay to Employee his current salary as a
consulting  fee  through  July 31,  1999,  payable  in  bi-weekly  installments.
Employee shall be responsible  for all income taxes,  self-employment  taxes and
similar  obligations  with respect to any  payments  made  hereunder,  and shall
defend,  indemnify  and hold  harmless  the Company and the  affiliated  persons
enumerated in Paragraph 5 below against any tax liabilities,  payments, interest
and penalties and related attorneys' fees and costs that may arise therefrom.

         4. BENEFITS AND OPTIONS.

          a.  Effective  December 4, 1998,  Employee  shall be entitled to COBRA
     benefits  to the extent  provided by law.  The Company  shall pay for these
     benefits until he obtains coverage through a subsequent employer,  or until
     December 31, 1999, whichever occurs first.

          b. The Company has granted to Employee  unexercised options to acquire
     an aggregate of 60,000  shares of vested  common  stock.  Options will stop
     vesting as of December 2, 1999 and all unvested options will terminate. The
     Company  hereby  agrees to extend the  exercise  period  for vested  shares
     through October 31, 1999.
<PAGE>
         5. RELEASE AND COVENANT NOT TO SUE.  Employee hereby forever  releases,
discharges,  cancels, waives, and acquits for himself, his spouse and his heirs,
executors,  administrators  and  assigns,  the  Company  and  any and all of its
affiliates,   subsidiaries,  corporate  parents,  agents,  directors,  officers,
owners,  employees,  attorneys,  successors and assigns, of and from any and all
rights, claims,  demands,  causes of action,  obligations,  damages,  penalties,
fees, costs, expenses, and liability of any nature whatsoever, whether in law or
equity,  which  Employee has, had or may hereafter  have against them, or any of
them  arising out of, or by reason of, any cause,  matter,  or thing  whatsoever
existing as of the date of execution  of this  Agreement,  WHETHER  KNOWN TO THE
PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT OR NOT, other than for breach
of this Agreement.

         This FULL WAIVER OF ALL CLAIMS includes, without limitation, attorney's
fees,  any claims,  demands,  or causes of action arising out of, or relating in
any manner whatsoever to, the employment and/or termination of the employment of
Employee by the Company, such as, BUT NOT LIMITED TO, any charge, claim, lawsuit
or other  proceeding  arising  under the Civil Rights Act of 1866,  1964,  1991,
Title VII as  amended  by the  Civil  Rights  Act of 1991,  the  Americans  with
Disabilities  Act, the Age  Discrimination  in Employment Act (ADEA),  the Labor
Management  Relations Act (LMRA),  the Employee  Retirement  Income Security Act
(ERISA),  the  Consolidated  Omnibus Budget  Reconciliation  Act, the Fair Labor
Standards Act (FLSA),  the Equal Pay Act, the  Rehabilitation  Act of 1973,  the
Arizona  Civil  Rights Act, the Family and Medical  Leave Act of 1993,  Worker's
Compensation  Claims,  or any other federal,  state,  or local  statute,  or any
contract,  agreement,  plan or policy. Employee further covenants and agrees not
to institute, nor cause to be instituted, any legal proceeding, including filing
any claim or complaint with any government  agency alleging any violation of law
or public policy or seeking  worker's  compensation,  against the Company and/or
any and  all of its  affiliates,  subsidiaries,  corporate  parents,  directors,
agents, officers, owners, employees,  successors and assignees premised upon any
legal theory or claim whatsoever,  including without limitation, contract, tort,
wrongful  discharge,  personal  injury,  interference  with contract,  breach of
contract,  defamation,  negligence,  infliction of emotional distress, fraud, or
deceit, except to enforce the terms of this Agreement.

         Employee  acknowledges that the considerations  afforded him under this
Agreement,  including the payments and considerations  described in Paragraphs 3
and 4 above,  are in full and complete  satisfaction  of any claims Employee may
have, or may have had relating to the Company,  including any arising out of his
employment with the Company (or any subsidiary) or the termination thereof.

         Company hereby  forever  releases,  discharges,  cancels,  waives,  and
acquits  Employee of and from any and all  rights,  claims,  demands,  causes of
action, obligations, damages, penalties, fees, costs, expenses, and liability of
any nature  whatsoever,  whether in law or equity,  which Company has had or may
hereafter  have against him from the date of this  Agreement,  WHETHER  KNOWN OR
UNKNOWN TO THE PARTIES AT THE TIME OF  EXECUTION OF THIS  AGREEMENT,  other than
for breach of this Agreement,  and except for any action or omission as to which
the Employee is not entitled to  mandatory  indemnification  under ss.145 of the
Delaware  Corporate  Code, or as to any matter set forth in  ss.102(b)(7)(i)  to
(iv) thereof (as if Employee were a director).

         6. TIME PERIOD OF  CONSIDERING OR CANCELING  THIS  AGREEMENT.  Employee
acknowledges  that he has been  offered a period of time of at least  twenty-one
(21) days to consider  whether to sign this  Agreement,  which he hereby waives,
and the Company  agrees that  Employee  may cancel  this  Agreement  at any time
during the seven (7) days  following  the date on which this  Agreement has been
signed by all  parties  to this  Agreement.  In order to  cancel or revoke  this
Agreement,  Employee  must  deliver to the  Company  at 4747 North 22nd  Street,
Phoenix,  Arizona  85016-4708,  attention Richard Meise,  written notice stating
that  Employee is canceling or revoking  this  Agreement.  If this  Agreement is
timely  canceled or revoked,  none of the provisions of this Agreement  shall be
effective  or  enforceable  and the Company  shall not be  obligated to make the
<PAGE>
payments to Employee or to provide Employee with the other benefits described in
this Agreement.

         7.  CONFIDENTIALITY.  Employee  and the  Company  agree to  maintain in
confidence  the terms and existence of this Agreement and the  discussions  that
led to its  creation  and  execution,  with the  exception  that the Company may
disclose  this  Agreement  and its terms to the extent  required or  appropriate
under applicable  securities  exchange or other laws or regulations and that the
Employee  may disclose  such matters to any attorney who is providing  advice to
Employee,  to any  accountant  or federal or state tax  agency for  purposes  of
complying with any tax laws, or as otherwise required by law. Further,  Employee
acknowledges his continuing  obligations to the Company under paragraphs 10, 11,
12,  13, 14, 16 and 23 of  Employment  Agreement  dated  June 9, 1997,  which is
incorporated  herein by reference and shall apply to this  agreement as if fully
set forth herein,  and acknowledges  that he has returned to the Company and has
not retained in his possession any  confidential  or proprietary  information or
any copy or embodiment thereof.  These obligations,  as well as any other duties
imposed  upon  Employee  by law  or  any  separate  confidentiality  or  similar
agreement  the Employee has entered  into with the  Company,  shall  survive the
termination  of  Employee's  employment.  Employee  shall be permitted to obtain
employment  that  is  not  otherwise  inconsistent  with  paragraph  10  of  his
Employment  Agreement  without  losing any of the benefits of paragraphs 3 and 4
hereof. The Company  acknowledges that Employee shall be permitted to use and/or
work in the field of the service  initiative  which  Employee  presented  to the
Board of Directors in October 1998 and that such employment by Employee will not
violate  paragraph 10 of Employee's  Employment  Agreement or constitute  use by
Employee of the Company's  proprietary  information.  Nothing  contained  herein
preclude  the  Company  from  engaging  in the same or similar  business  as the
service initiative which Employee presented to the Board of Directors in October
1998 or from using  information  developed or compiled by Employee in connection
therewith.

         8. RELIANCE.  Employee  warrants and represents that: (i) he has relied
on his  own  judgment  regarding  the  consideration  for and  language  of this
Agreement;  (ii) he has been given a reasonable  period of time to consider this
Agreement,  has been advised to consult with counsel of his own choosing  before
signing this  Agreement,  and has consulted with counsel or voluntarily  elected
not to consult with  independent  counsel;  (iii) the Company has not in any way
coerced  or unduly  influenced  him to  execute  this  Agreement;  and (iv) this
Agreement is written in a manner that is  understandable  to him and he has read
and understood all paragraphs of this Agreement.
<PAGE>
         9. NATURE OF THE AGREEMENT.  This Agreement and all provisions thereof,
including all representations and promises contained herein, are contractual and
not a mere recital and shall continue in permanent  force and effect.  Except as
provided in paragraph 7, above,  this Agreement  constitutes the sole and entire
agreement of the parties with respect to the subject matter hereof,  superseding
all prior agreements and  understandings  between the parties,  and there are no
agreements  of any  nature  whatsoever  between  the  parties  hereto  except as
expressly  stated  herein.  This Agreement may not be modified or changed unless
done so in  writing,  signed by both  parties.  In the event that any portion of
this  Agreement  is found to be  unenforceable  for any reason  whatsoever,  the
unenforceable  provision shall be considered to be severable,  and the remainder
of the Agreement  shall continue to be in full force and effect.  This Agreement
shall be governed by and construed in  accordance  with the laws of the State of
Arizona without regard to choice of law principles.

         10. NO  ADMISSION OF  LIABILITY.  Nothing  contained in this  Agreement
shall be  construed  in any manner as an  admission  by any party that they have
violated any statue, law or regulation, or breached any contract or agreement.

         11. NO DISPARAGEMENT.  The Company agrees to use reasonable  efforts to
ensure that the current officers and directors of the Company during the term of
their  employment do not, and Employee agrees that he will not, make disparaging
or derogatory remarks, whether oral or written, about the other party or, in the
case  of  Employee,  the  Company  or its  subsidiaries,  affiliates,  officers,
directors, employees or agents.

         12.  PRESS  RELEASE.  The parties  acknowledge  that the press  release
attached hereto as Exhibit A is mutually  acceptable and will be issued promptly
following the date hereof.

         13. REFERENCE.  The parties acknowledge that the letter attached hereto
as Exhibit B is mutually  acceptable  to both parties and may be utilized by Mr.
Mihaylo for presentation to future employers.


CHARLES V. MIHAYLO                                   MICROTEST, INC.

                                                    /s/  Richard G. Meise
/s/  Charles V. Mihaylo                         By: /s/  Kent C. Mueller
-----------------------------                      -----------------------------

                                                Its:
-----------------------------                       ----------------------------

Dated:                                          Dated:
     ------------------------                         --------------------------