EXHIBIT 99.7



COMMERCE GROUP CORP.

6001 NORTH 91ST ST.

MILWAUKEE, WISCONSIN  53225-1795

(414) 462-5310

FAX (414) 462-5312

E-MAIL  info@commercegroupcorp.com

WEBSITE www.commercegroupcorp.com







AND/OR COMMERCE/SANSEB JOINT VENTURE (Joint Venture)

AND/OR HOMESPAN REALTY CO., INC. (Homespan)

AND/OR ECOMM GROUP INC. (Ecomm)

AND/OR SAN LUIS ESTATES, INC. (SLE)

AND/OR SAN SEBASTIAN GOLD MINES, INC. (Sanseb)

AND/OR UNIVERSAL DEVELOPERS, INC. (UDI)

ALL LOCATED AT THE SAME ADDRESS







May 30, 2008





Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

1733 North Farwell Avenue

Milwaukee, Wisconsin  53202



Dear Mr. Machulak:



At today's Commerce Group Corp. (Commerce) Directors' meeting, the

Directors were informed about the annual confirmation, disclosure and

status letter from Commerce, its subsidiaries, its affiliates, and the

Joint Venture, and to establish and confirm the amount due and the

collateral pledged along with any other Commerce obligations or

agreements made to Machulak, Robertson & Sodos, S.C. (Law Firm) referred

to as Lender, as of Commerce's fiscal year ended March 31, 2008.  Today,

Commerce's Directors, by unanimous consent, approved, ratified and

confirmed the contents of this letter and authorized me to submit its

understanding of your status with Commerce, which is as follows:



1.   Accrued Legal Fees



The Law Firm which represents Commerce in which a son of the

President is a principal is owed the sum of $454,443.75 for 2,019.75

hours of legal services rendered from July 1980 through February 29,

2008.  By agreement on the date of payment, these fees are to be

adjusted to commensurate with the current hourly fees charged by the

Law Firm.  Such adjustment was made during this fiscal period to

correspond with the current hourly rate change.





<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 2 of 8 Pages





As of March 31, 2008, the following parties are collectively and

individually identified as the Lender(s): General Lumber & Supply

Co., Inc. (GLSCO); Edward L. Machulak  as an individual and not as a

Director or Officer of Commerce (ELM); the Edward L. Machulak

Rollover Individual Retirement Account (ELM RIRA), the Sylvia

Machulak Rollover Individual Retirement Account (SM RIRA), Sylvia

Machulak, as a consultant and as an individual (SM), John E.

Machulak and Susan R. Robertson, husband and wife (M&R), the

Machulak, Robertson & Sodos, S.C. Law Firm (Law Firm), Circular

Marketing, Inc. (CMI) and Edward A. Machulak as an individual (EAM).



2.   Collateral Pledged



The following collateral has been previously assigned to certain

Lenders, including John E. Machulak and Susan R. Robertson, husband

and wife (M&R), the Machulak, Robertson & Sodos, S.C. Law Firm (Law

Firm), Circular Marketing, Inc. (CMI) and Edward A.  Machulak as an

individual (EAM) as of March 31, 2007, pursuant to resolutions

adopted by the Directors:



(1)  Commerce/Sanseb Joint Venture (Joint Venture)



Both Commerce and San Sebastian Gold Mines, Inc. have assigned

all of the rights, title, claims, remedies and interest that

each has in the Joint Venture to the Lenders.  Reference is

made to Historical information - San Sebastian Gold Mine

Concession.



(2)  New SSGM Exploration Concession/License (New SSGM) -

approximately 40.7694 square kilometers (10,070 acres)

Government of El Salvador Resolution No. 27.



On October 20, 2002, the Company applied for the New SSGM,

which covers an area of 42 square kilometers and includes

approximately 1.2306 square kilometers of the Renewed SSGM.

The New SSGM is in the jurisdiction of the City of Santa Rosa

de Lima in the Department of La Union and in the Nueva Esparta

in the Department of Morazan, Republic of El Salvador, Central

America.  On February 24, 2003, the El Salvador Department of

Hydrocarbons and Mines (DHM) issued the New SSGM for a period

of four years starting from the date following the notification

of this resolution which was received on March 3, 2003.  The

New SSGM may be extended for two two-year periods, or for a

total of eight years.  Besides the San Sebastian Gold Mine,

three other formerly operative gold and silver mines known as

the La Lola Mine, the Santa Lucia Mine, and the Tabanco Mine

are included in the New SSGM and are being





<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 3 of 8 Pages





explored.  The Company has complied as required by filing its

annual activity report and it paid the annual surface tax.

This concession had been assigned collectively to all of the

Lenders named herein on May 12, 2003 and the assignment was

included in the May 12, 2003 confirmation agreement as Exhibit

B.



(3) Lease agreement by and between Mineral San Sebastian Sociedad

Anomina de Capital Variable (Misanse) and Commerce dated

January 14, 2003



The term of this lease agreement coincides with the term of the

Renewed San Sebastian Gold Mine Exploitation Concession and

consists of 1,470 acres owned by Misanse.  This lease agreement

has been assigned to all of the Lenders named herein on May 12,

2003 and the assignment was included in the May 12, 2003

confirmation agreement as Exhibit B.



(4) Renewed San Sebastian Gold Mine Exploitation Concession/License

(Renewed SSGM) - approximately 1.2306 square kilometers (304

acres), Department of La Union, El Salvador, Central America

(pledged and assigned as collateral on May 10, 2004) Government

of El Salvador Agreement No. 591.



On September 6, 2002, at a meeting held with the El Salvadoran

Minister of Economy and the DHM, it was agreed to submit an

application for the Renewed SSGM for a 30-year term and to

simultaneously cancel the concession obtained on July 23, 1987.

On September 26, 2002, the Company filed this application.  On

February 28, 2003 (received March 3, 2003) the DHM admitted to

the receipt of the application and the Company proceeded to

file public notices as required by Article 40 of the El

Salvadoran Mining Law and its Reform (MLIR).  On April 16,

2003, the Company's El Salvadoran legal counsel filed with the

DHM notice that it believed that it complied with the

requirements of Article 40, and that there were no objections;

and requested that the DHM make its inspection as required by

MLIR Article 42.  The Company then provided a bond which was

required by the DHM to protect third parties against any damage

caused from the mining operations, and it simultaneously paid

the annual surface t ax.  On August 29, 2003 the Office of the

Ministry of Economy formally presented the Company with the

twenty-year Renewed SSGM which was dated August 18, 2003.  This

Renewed SSGM replaces the collateral that the same parties held

with the previous concession.  On May 20, 2004 (delivered June

4, 2004) the Government of El Salvador, under their Agreement

Number 591, extended the exploitation concession for a period

of 30 years.  A copy of the assignment dated May 10, 2004, is

attached to the May 10, 2004 confirmation letter as Exhibit B

and the Renewed SSGM agreement is attached to Exhibit B and

referred to as Exhibit 1.





<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 4 of 8 Pages





(5) San Cristobal Mill and Plant (SCMP) three-year lease by and

between Commerce and Corporacion Salvadorena de Inversiones

(Corsain), an El Salvadoran governmental agency, executed on

Monday, April 26, 2004, retroactive to November 13, 2003.

Pledged and assigned as collateral on May 10, 2004.



The renewed three-year SCMP lease for the property located near

the City of El Divisadero was finalized and executed on Monday,

April 26, 2004, and is retroactive to November 13, 2003.  This

May 10, 2004 assignment is included in the May 10, 2004

confirmation letter as Exhibit B and the lease agreement is

attached to Exhibit B and referred to as Exhibit 2.



On March 25, 2008 a nineteen-month lease retroactive to

November 12, 2006 was executed by and between Corsain and

Commerce.  The lease was renewed on June 12, 2008 for a

six-month period to expire on December 11, 2008.  Reference is

made to Exhibit 10.16 of Commerce's Form 10-K for its fiscal

year ended March 31, 2008 for a copy of this lease.



(6) Nueva Esparta Exploration Concession/License (Nueva Esparta) -

45 square kilometers (11,115 acres) Resolution No. 271



On or about October 20, 2002, the Company filed an application

with the DHM for the Nueva Esparta Exploration

Concession/License which consists of 45 square kilometers and

is located north and adjacent to the New SSGM.  On May 25, 2004

the Government of El Salvador, under their Resolution No. 271,

issued the Nueva Esparta Exploration Concession/License for a

period of four years starting from the date following the

notification of this resolution which was received on June 4,

2004.  This concession/license may be extended for two two-year

periods or for a total of eight years.  This rectangular area

is in the Departments of La Union (east) and Morazan (west) and

in the jurisdiction of the City of Santa Rosa de Lima, El

Salvador, Central America.  Included in the Nueva Esparta are

eight other formerly operated gold and silver mines known as:

the Banadero Mine, the Carrizal Mine, the Copetillo Mine, the

Grande Mine, the La Joya Mine, the Las Pinas Mine, the

Montemayor Mine, and the Or o Mine.  A copy of the assignment

dated May 9, 2005 was attached to the May 9, 2005 confirmation

letter as Exhibit C and the Nueva Esparta Exploration

Concession is attached to Exhibit C and referred to as Exhibit

1.



<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 5 of 8 Pages





(7) Acknowledgment of collateral provided through March 31, 2008



Commerce's Directors have on May 30, 2008 authorized and

directed Commerce's Officers to assign all of the rights,

titles, claims, remedies and interest in all of its assets that

it has, including any assets owned by the Joint Venture, to

GLSCO, ELM, the ELM RIRA, the SM RIRA, SM, and from March 31,

2007 to include M&R, the Law Firm, CMI and EAM, collectively

and individually referred to as Lenders, as additional

collateral for all of the outstanding loans and obligations as

of March 31, 2008, including all future advances of any kind.



5.   Cross Pledge Collateral Agreement



GLSCO, ELM, the ELM RIRA, the SM RIRA and SM individually are

entitled to specific collateral that has been pledged to them by

Commerce, its subsidiaries, affiliates and the Joint Venture.  Upon

default by Commerce, or its subsidiaries or affiliates or the Joint

Venture, then GLSCO, ELM, the ELM RIRA, the SM RIRA and SM have the

first right to the proceeds from the specific collateral pledged to

each of them.  Commerce, its subsidiaries, affiliates, and the Joint

Venture also have cross-pledged the collateral without diminishing

the rights of the specific collateral pledged to each of the

following:  GLSCO, ELM, the ELM RIRA, the SM RIRA and SM.  The

purpose and the intent of the cross pledge of collateral is to

assure GLSCO, ELM, the ELM RIRA, the SM RIRA, and SM, that each of

them would be paid in full; thus, any excess collateral that would

be available is for the purpose of satisfying any debts and

obligations due to each of the named parties.  The formula to be

used (after deducting the payments made from the specific

collateral) is to total all of the debts due to GLSCO, ELM, the ELM

RIRA, the SM RIRA, SM, and from March 31, 2007 to include M&R, the

Law Firm, CMI and EAM, and then to divide this total debt into each

individual debt to establish each individual's percentage of the

outstanding debt due.  This percentage then will be multiplied by

the total of the excess collateral to determine the amount of

proceeds each party should receive from the excess collateral.  Then

the amount due to each of them would be distributed accordingly.



6.   Cancellation of Inter-Company Debts Upon Default



Since certain of the collateral specifically or collectively pledged

to GLSCO, ELM, the ELM RIRA, the SM RIRA, SM and from March 31, 2007

to include M&R, the Law Firm, CMI and EAM, consists of the common

stock of Homespan, Ecomm, Sanseb, SLE, Misanse, UDI and the interest

in the ownership of the Joint Venture, Commerce



<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 6 of 8 Pages





agreed, upon default of the payment of principal or interest to any

of the individual Lender(s) mentioned herein, that it will

automatically cancel any inter-company debts owed to Commerce by any

of its wholly-owned subsidiaries or affiliates or the Joint Venture

at such time as any of the stock or Joint Venture ownership is

transferred to the collateral holders as a result of default of any

promissory note.



7.   Guarantors



This agreement further confirms that Commerce and all of the

following are guarantors to the obligations due to the Law Firm and

to the loans made by the Law Firm to Commerce:  Joint Venture,

Homespan, Ecomm, SLE, Sanseb and UDI.  They jointly and severally

guarantee payment of the note(s) that they caused to be issued and

also agree that these note(s) may be accelerated in accordance with

the provisions contained in the agreement and/or any collateral or

mortgages securing these notes.  Also, Commerce, all of its

subsidiaries and the Joint Venture agree to the cross pledge of

collateral for the benefit of GLSCO, ELM, the ELM RIRA, the SM RIRA,

SM, and from March 31, 2007 to include M&R, the Law Firm, CMI and

EAM.  Reference is made to Exhibit 5 included in the April 9, 1990

confirmation letter.



8.   Re-Execution Agreement(s)



In the event the Law Firm deems that it is necessary or advisable

for the Law Firm to have Commerce re-execute any document(s) entered

into, including, but not limited to the promissory note(s) or

collateral agreement(s), Commerce will re-execute such document(s)

reasonably required by the Law Firm.  Commerce also acknowledges

that Commerce may be liable to pay certain costs related to any of

the transactions entered into with the Law Firm.  If at a later date

the Law Firm determines that an error has been made in the payment

of such costs to the Law Firm, then the Law Firm may demand payment

and Commerce does hereby agree to make such payment forthwith.  All

requests for corrections of any errors and/or payment of costs shall

be complied with by Commerce within seven (7) days of the Law Firm's

written request.  The failure of Commerce to comply with Commerce's

obligation(s) hereunder shall constitute a default and shall entitle

the Law Firm to the remedies available for default under any

provisions of the agreements including, but not limited to the

promissory note(s) and/or the collateral pledge agreement(s) and/or

any other Commerce obligation(s).



<PAGE>



Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 7 of 8 Pages





9.    Omissions



Commerce believes that it has included all of its obligations,

monies due and has listed all of the collateral due to the Law

Firm, however, since these transactions have taken place over  a

long period of time in which changes could have taken place, it is

possible that inadvertently some item(s), particularly collateral,

could have been omitted.  If that should prove to be a fact, then

Commerce, the Joint Venture, Homespan, Ecomm, SLE, Sanseb, and UDI

agree that those omissions of collateral, if any, are meant to be

included as collateral under this confirmation agreement.



If you are in agreement with the contents of this letter, please sign

below and return one copy to Commerce.



Very truly yours,



COMMERCE GROUP CORP.



/s/ Christine M. Wolski



Christine M. Wolski

Secretary







<PAGE>





Mr. John E. Machulak

Machulak, Robertson & Sodos, S.C. (Law Firm)

May 30, 2008

Page 8 of 8 Pages







The contents of this letter are agreed by the following:



COMMERCE/SANSEB JOINT VENTURE              HOMESPAN REALTY COMPANY, INC.

as Guarantor (Joint Venture)               as Guarantor (Homespan)



/s/ Edward A. Machulak                     /s/ Edward A. Machulak



---------------------------------------    ------------------------------

By:  Edward A. Machulak, Auth. Designee    By:  Edward A. Machulak, President





ECOMM GROUP INC.                           SAN LUIS ESTATES, INC.

as Guarantor (Ecomm)                       as Guarantor (SLE)





/s/ Edward A. Machulak                     /s/ Edward A. Machulak



---------------------------------------    ------------------------------

By:  Edward A. Machulak, President         By: Edward A. Machulak, President





SAN SEBASTIAN GOLD MINES, INC.             UNIVERSAL DEVELOPERS, INC.

as Guarantor (Sanseb)                      as Guarantor (UDI)



/s/ Edward A. Machulak                     /s/ Edward A. Machulak



---------------------------------------    ------------------------------

By:  Edward A. Machulak, President         By:  Edward A. Machulak, President





Accepted by:





MACHULAK, ROBERTSON & SODOS, S.C. (Law Firm)



/s/ John E. Machulak



--------------------------------------------

By:  John E. Machulak, Authorized Signer

Date:  May 30, 2008