Exhibit
10.7








BSD
Medical Corporation





Notice of
Grant of Stock Option























Dear  :





1.           Grant of
Option.  BSD Medical Corporation (the "Company"), hereby grants
to you an option (the "Option") to purchase common shares of the Company (the
"Shares").  The number of Option Shares and the exercise price per
share (the" Exercise Price") are set forth below. The Option is subject to all
of the terms and conditions of this Agreement and the Company's 1998 Stock
Incentive Plan (the "Plan"), a copy of which is attached hereto.





Status of
Option:           _____
Incentive Stock Option


_____ Non-Incentive Stock
Option





Exercise Price Per
Share:  $





Date of
Grant: ______________________





Expiration
Date: _____________________





Number of Shares Subject to
Option:





2.           Vesting of
Option.  The cumulative number of Shares subject to purchase at
any particular time is referred to as "Vested Shares."  The Option may
be exercised according to the following vesting schedule.





Number
      of full Months after
            Percent
      of Optiondate of this
      Agreement
            Shares that are
      Vested





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Unless the termination of your
employment results from your death or disability, this Option shall expire on
the earlier of the Expiration Date set forth above or three (3) months after
termination of your employment.  In the event that the termination of
your employment results from your death or disability, this Option shall expire
on the earlier of the Expiration Date set forth above or six (6) months after
termination of your employment, and can be exercised either by you, or in the
case of your death, by your beneficiary/beneficiaries.





3.           Manner of
Exercise.  This Option shall be exercisable by delivery to the
Company of an executed written Notice of Stock Option Exercise and Agreement
(“Notice”) in such form as may be approved by the Company, which shall set forth
your decision to purchase all of a portion of the Vested Shares and the number
of Shares to be purchased.





Your notice shall be accompanied by
full payment of the Exercise Price for the Shares being purchased, to be paid in
cash or by bank check.  Alternatively the Exercise Price may be paid
by surrender of issued and outstanding common shares of the Company having a
fair market value equal to the Exercise Price, or by any combination
thereof.





When the Company has received such
Notice and payment, the Company shall issue a certificate or certificates
representing the Shares purchased, registered in your name or in the name of
your legal representative or other successor (the "Holder").





In the event of any conflict between
the provisions of the Plan and the terms and conditions of this Agreement, the
provisions of the Plan shall govern.





4.           Stock
Splits.  The number of Shares covered by your Option, and the
Purchase Price, shall be proportionately adjusted for any increase or decrease
in the number of issued and outstanding shares of the Company’s common stock
resulting from a subdivision or consolidation of such shares or the payment of
share dividend or any other increase or decrease in the number of shares
effected without receipt of consideration by the Company.  If the
Company shall be the surviving Company in any merger or consolidation, your
Option shall apply to the number of securities to which you would have been
entitled if you had been the owner of the Shares on the date of the merger or
consolidation.  If there is a merger, consolidation, sale of assets or
similar transaction involving the Company, and which the Company is not the
surviving entity, then the Company shall obtain the agreement of the successor
in such transaction to assume the obligations of the Company hereunder, by
substituting an equivalent option for the option granted hereby.





5.           Sale, Merger or Substantial
Change of Control of Company.  In the event of any acquisition,
merger, substantial change of control of the Company, or other similar
transaction, at the time of such event, your Option to purchase all of the
Shares herein granted to you shall become immediately vested and shall become
exercisable.





6.           Legends on
Certificates.  Each certificate representing the Shares issued
pursuant to your exercise of the Option may have impressed thereon such
restrictive legends as the Company deems appropriate to assure compliance with
applicable securities laws.


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7.           Exercise Not
Required.  You have no obligation to exercise your Option, and
you will have no rights as a stockholder of the Company until you exercise the
Option, in whole or in part, and the Company has issued to you a certificate
representing your Shares.





Should you have any questions in regard
to your Option, please contact the undersigned or any other officer of the
Company.  If you agree to the terms of this letter, please execute and
return this Agreement.





For
      the Company:NameTitle





I
understand and agree to the foregoing terms.





Holder:Signature
      of Execution





In the
event of my death, I hereby declare the following as my
beneficiary/beneficiaries (use back of page if more space is
required):





Primary
Beneficiary/Beneficiaries:





Name
            
            Relationship
            
            Percent
            
            S.
      S.  No.





Secondary
Beneficiary/Beneficiaries if all of your Primary Beneficiary/Beneficiaries are
not living:





Name
              
              Relationship
              
              Percent
              
              S.
      S.  No.