EXHIBIT 99.3

                            COMMERCE GROUP CORP.
                            6001 NORTH 91ST ST.
                         MILWAUKEE, WI  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 9, 2005


Mr. Edward L. Machulak
Edward L. Machulak Rollover
Individual Retirement Account
903 West Green Tree Road
River Hills, Wisconsin  53217

Dear Mr. Machulak:

At today's Commerce Group Corp. (Commerce) Directors' meeting, the
Directors were informed about the annual confirmation, disclosure and
status letter that you requested from Commerce and its affiliates to
establish and confirm the amount due and the collateral pledged along
with any other Commerce obligations or agreements made to the Edward L.
Machulak Rollover Individual Retirement Account (ELM RIRA and/or Lender)
as of Commerce's fiscal year ended March 31, 2005.  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.  Promissory Notes and Other Obligations

    The total amount of all of the open-ended, secured, on-demand
    promissory notes (Notes), together with interest due to the ELM RIRA,
    amounts to $1,022,395.77 as of March 31, 2005.  These Notes, since
    April 1, 1994, bear interest, payable monthly, at the rate of 4% over
    the prime rate established from time to time by the First National
    Bank of Chicago, Chicago, Illinois, (then Bank One; now the prime
    rate published in the Wall Street Journal), but not less than 16% per
    annum (Schedule of Principal and Interest as of March 31, 2005,
    Exhibit A).  Commerce is no longer issuing monthly Notes for the
    payment of interest, etc., but pursuant to our understanding,
    Commerce is augmenting all additions and advances made by the ELM
    RIRA, and it will deduct any payments or credits made by Commerce to
    the current open-ended, secured, on-demand, outstanding Notes issued
    or obligations owed to the ELM RIRA.

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 2 of 10 Pages


    However, on this date, Commerce's Directors have authorized its
    Officers to issue renewed annual note(s) (Exhibit B) so that the
    Lender will have a current substituted dated debt instrument.  The
    Directors acknowledged that the issuance of note(s) for each
    transaction are too cumbersome and are not practicable to manage.
    Also, the length of time involved and the number of transactions make
    it impractical to devote the time and effort to issue a note for each
    transaction.  Therefore, the Directors have unanimously agreed to the
    following resolution, which was adopted on May 9, 2005:

         WHEREAS, in the past 20 years or more the following parties:
    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),
    and Sylvia Machulak, as a consultant and as an individual (SM),
    hereafter collectively and individually identified as the Lender(s),
    have accounted for advancing cash funds, earning accrued interest,
    and for appropriate credit which was reconciled to the open-ended,
    secured, on-demand notes(s); and

         WHEREAS, the Directors desire to minimize the record keeping in
    these transactions without jeopardizing, diminishing, altering,
    changing or losing any rights that the Lenders have by changing the
    procedures in handling the recording of any notes(s) issued or to be
    issued; and

          WHEREAS, in order to provide an easier accounting facility by
    renewing the notes(s) on an annual basis to coincide with the
    Company's fiscal year (which presently ends on March 31) and to
    incorporate said renewed note(s) with the annual confirmation
    agreement(s); and

          WHEREAS, prior to the change to issue substituted renewed
    note(s), the initial promissory note(s) were considered to be
    open-ended, secured, on-demand and the additions and deductions were
    recognized by separate accounting records; therefore, be it

              RESOLVED, That the Directors authorize and empower the
         Officers to substitute and issue renewed consolidated promissory
         note(s) at the end of each fiscal year beginning with the
         Company's fiscal year ended March 31, 2005 to the following:
         General Lumber & Supply Co., Inc. (GLSCO); Edward L. Machulak
         as an individual and not as a


<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 3 of 10 Pages



         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), and
         Sylvia Machulak, as a consultant and as an individual (SM),
         hereafter collectively and individually identified as the
         Lender(s); and

              BE IT FURTHER RESOLVED, That the Officers of the Company
         are authorized and empowered to assure the Lender(s) that by
         substituting and consolidating the existing note(s) and issuing
         the renewed note(s) on the last day of the Company's fiscal year
         beginning with March 31, 2005 with the understanding that the
         intention is that the Lender(s) will not jeopardize, lose,
         diminish, risk, alter or change any rights, including the pledge
         of collateral, that are inherent with the initial note(s) by the
         issuance of annual renewed open-ended, secured, on-demand
         promissory note(s); and

              BE IT FURTHER RESOLVED, That the Directors acknowledge that
         the only purpose of the change and substitution to issue annual
         renewed notes(s) is for the convenience, reduced accounting and
         reducing the paperwork involved; and

              BE IT FURTHER RESOVED, That the Officers are authorized and
         empowered to perform any act that they deem necessary to
         accommodate the purpose of issuing annual renewed note(s).

2.  Other Agreements and Transactions

    a.  On August 14, 2000, Commerce's Directors authorized Commerce's
        Officers to negotiate a sale of its non-income producing assets,
        in this case, precious stones and jewelry, to the ELM RIRA at
        Commerce's book value in exchange for a reduction of debt owed by
        Commerce to the ELM RIRA.  The book value of the precious stones
        and jewelry is $132,447.77 as of March 31, 2005.

    b.  On March 24, 2005, the ELM RIRA purchased from Commerce 500,000
        of Commerce's restricted common shares, $.10 par value, at a unit
        price of $.105 a share, for a total of $52,500.  The share price
        was established by using the same formula used by the Directors
        and others who purchased common shares on the same date.  The
        average close bid price for the period beginning December 1, 2004
        through February 11, 2005 was used.  The payment for these

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 4 of 10 Pages


        shares was made by reducing the outstanding promissory note
        balance due to the ELM RIRA by Commerce.

3.  Acknowledgement of previously recorded collateral provided to the
    Lenders

    a.  Historical information - San Sebastian Gold Mine Concession

        General Lumber & Supply Co., Inc. (GLSCO), Edward L. Machulak
        (ELM), as an individual and not as a Director or Officer of
        Commerce the ELM RIRA and the Sylvia Machulak Rollover Individual
        Retirement Account (SM RIRA) collectively and individually
        identified as the Lender(s), have been assigned on October 19,
        1987, all of the rights, titles, claims, remedies and interest in
        the Joint Venture, and to the mine concession granted by the
        Government of El Salvador to Mineral San Sebastian, S.A. de C.V.
        (Misanse) on July 23, 1987, and thereafter from time to time
        amended, and which Misanse then assigned to the Joint Venture on
        September 22, 1987.  This collateral specifically includes, but
        is not limited to, all of the San Sebastian Gold Mine (SSGM)
        precious metal ore reserves.  Commerce and the Joint Venture have
        the right to assign this and any subsequent concession agreement.
        Reference is made to Exhibit 2 included in the April 9, 1990
        confirmation letter.

        The following collateral has been previously assigned to the
        Lenders 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

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 5 of 10 Pages


             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 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


<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 6 of 10 Pages


             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
             No. 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.

        (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.

    c.  Acknowledgment of collateral provided through May 9, 2005

        Commerce's Directors have on May 9, 2005 authorized and directed
        Commerce's Officers to assign all of the rights, titles, claims,
        remedies and interest it has to GLSCO, ELM, the ELM RIRA, the SM
        RIRA and SM, collectively and individually referred to as
        Lenders, as additional collateral for all of the outstanding
        loans and obligations as of March 31, 2005, including all future
        advances of any kind.  Collateral that has been provided through
        May 9, 2005 is:

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 7 of 10 Pages



        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 is attached
        to this document (Exhibit C) and the Nueva Esparta Exploration
        Concession is attached to Exhibit C and referred to as Exhibit 1.

4.  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 deduct ing
    the payments made from the specific collateral) is to total all of
    the debts due to GLSCO, ELM, the ELM RIRA, the SM RIRA and SM, 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

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 8 of 10 Pages

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

5.  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 and SM consists of the
    common stock of Homespan, Ecomm, Sanseb, SLE, Misanse, UDI and the
    interest in the ownership of the Joint Venture, Commerce 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.

6.  Guarantors

    This agreement further confirms that Commerce and all of the
    following are guarantors to the obligations due to the ELM RIRA and
    to the loans made by the ELM RIRA 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
    and SM.  Reference is made to Exhibit 3 included in the April 9, 1990
    confirmation letter.

7.  Re-Execution Agreement(s)

    In the event the ELM RIRA deems that it is necessary or advisable for
    the ELM RIRA 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 ELM RIRA.  Commerce also acknowledges that
    Commerce may be liable to pay certain costs related to any of the
    transactions entered into with the ELM RIRA.  If at a later date the
    ELM RIRA determines that an error has been made in the payment of
    such costs to the ELM RIRA, then the ELM RIRA 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 ELM RIRA's
    written request.   The failure of Commerce to comply with Commerce's
    obligation(s)

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 9 of 10 Pages


    hereunder shall constitute a default and shall entitle the ELM RIRA
    to the remedies available for default und er 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).

8.  Omissions

    Commerce believes that it has included all of its obligations, monies
    due and has listed all of the collateral due to the ELM RIRA,
    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/ Edward A. Machulak

Edward A. Machulak
Secretary

<PAGE>

Mr. Edward L.  Machulak
Edward L. Machulak
Rollover Individual Retirement Account
May 9, 2005
Page 10 of 10 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 L. Machulak                    /s/ Edward L. Machulak

_______________________________________   __________________________________
By:  Edward L. Machulak, Auth. Designee   By:  Edward L. Machulak, President


ECOMM GROUP INC.                          SAN LUIS ESTATES, INC.
as Guarantor (Ecomm)                      as Guarantor (SLE)

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

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


SAN SEBASTIAN GOLD MINES, INC.            UNIVERSAL DEVELOPERS, INC.
as Guarantor (Sanseb)                     as Guarantor (UDI)

/s/ Edward L. Machulak                    /s/ Edward L. Machulak

____________________________________      ____________________________________
By:  Edward L. Machulak, President        By:  Edward L. Machulak, President


Accepted by:

/s/ Edward L. Machulak
_______________________________________
Edward L.  Machulak Rollover Individual
Retirement Account
Date:  May 9, 2005


<PAGE>



                       Exhibit A to Exhibit 99.3
                (Schedule of Principal, Interest, Advances
                   and Withdrawals as of March 31, 2005
              has been purposely omitted as it only reflects
              the calculations of the principal and interest.)

<PAGE>

                        Exhibit B to Exhibit 99.3

                          RENEWED PROMISSORY NOTE


Borrower: Commerce Group Corp.       Lender:  Edward L. Machulak RIRA
          6001 North 91st Street              903 West Green Tree Rd.
          Milwaukee, WI  53225                Milwaukee, WI  53217

Principal Amount:      $1,022,395.77
Initial Rate:          4.000% + prime rate, but not less than 16.000%
Date of Renewed Note:  March 31, 2005

PROMISE TO PAY.  COMMERCE GROUP CORP. ("Borrower") promises to pay to the
EDWARD L.  MACHULAK ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT ("Lender"), or
order, in lawful money of the United States of America, the principal
amount of One Million Twenty Two Thousand Three Hundred Ninety Five and
77/100 00 Dollars ($1,022,395.77), together with interest, paid monthly,
on the unpaid principal balance from March 31, 2005, until paid in full.

PAYMENT.  This is an open-ended, secured, on-demand payment, renewed
promissory note.  Interest is to be paid monthly.  The Lender, at its
discretion, can add the monthly interest due to the principal balance.
Unless otherwise agreed or required by applicable law, payments will be
applied first to any accrued unpaid interest; and then to principal.  The
annual interest rate for this Note is computed on a 365/360 basis; that
is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the
actual number of days the principal balance is outstanding and the
interest is payable monthly.  Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in
writing.

VARIABLE INTEREST RATE.  The interest rate on this Note is subject to
change from time to time based on changes in the prime rate as quoted in
the Wall Street Journal plus four percent, but not less than sixteen
percent per annum.  Borrower understands that Lender may make loans to
the Borrower based on other rates as well.  The prime rate currently is
5.750% per annum.  The interest rate to be applied to the unpaid
principal balance of this Note will be at a rate of 4.000 percentage
points over the prime rate, but not less than 16.000% per annum.  NOTICE:
Under no circumstances will the interest rate on this Note be less than
16.000% per annum or more than the maximum rate allowed by applicable
law.

PREPAYMENT.  Borrower may pay without penalty all or a portion of the
amount owed earlier than it is due.  Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower's obligation
to pay on demand, the entire amount due.  Rather, any payment will reduce
the principal balance due.  Borrower agrees not to send Lender payments
marked "paid in full," "without recourse," or similar language.  If
Borrower sends such a payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain obligated to
pay any further amount owed to Lender.

INTEREST AFTER DEFAULT.  Upon default, including failure to pay on
demand, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 6.000 percentage
points over the prime rate or over the 16.000% rate, whichever is higher.
The interest rate will not exceed the maximum rate permitted by
applicable law.

DEFAULT.  Each of the following shall constitute an event of default
("Event of Default") under this Note:

     Payment Default.  Borrower fails to make any payment when demand is
     made under this Note.

     Other Defaults.  Borrower fails to comply with or to perform any
     other term, obligation, covenant or condition contained in this Note
     or in any of the related documents or to comply with or to perform
     any term, obligation, covenant or condition contained in any other
     agreement between Lender and Borrower.

<PAGE>

     Default in Favor of Third Parties.  Borrower or any Grantor defaults
     under any loan, extension of credit, security agreement, purchase or
     sales agreement, or any other agreement, in favor of any other
     creditor or person that may materially affect any of Borrower's
     property or Borrower's ability to repay this Note or perform
     Borrower's obligations under this Note or any of the related
     documents.

     False Statements.  Any warranty, representation or statement made or
     furnished to Lender by Borrower or on Borrower's behalf under this
     Note or the related documents is false or misleading in any material
     respect, either now or at the time made or furnished or becomes
     false or misleading at any time thereafter.

     Insolvency.  The dissolution or termination of Borrower's existence
     as a going business, the insolvency of Borrower, the appointment of
     a receiver for any part of Borrower's property, any assignment for
     the benefit of creditors, any type of creditor workout, or the
     commencement of any proceeding under any bankruptcy or insolvency
     laws by or against Borrower.

     Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower or by
     any governmental agency against any collateral securing the loan.
     However, this Event of Default shall not apply if there is a good
     faith dispute by Borrower as to the validity or reasonableness of
     the claim which is the basis of the creditor or forfeiture
     proceeding and if Borrower gives Lender written notice of the
     creditor or forfeiture proceeding and deposits with Lender monies or
     a surety bond for the creditor or forfeiture proceeding, in an
     amount determined by Lender, in its sole discretion, as being an
     adequate reserve or bond for the dispute.

     Events Affecting Guarantor.  Any of the preceding events occurs with
     respect to any Guarantor of any of the indebtedness or any Guarantor
     disputes the validity of, or liability under, any guaranty of the
     indebtedness evidenced by this Note.

     Adverse Change.  A material adverse change occurs in Borrower's
     financial condition, or Lender believes the prospect of payment or
     performance of this Note is impaired.

     Insecurity.  Lender in good faith believes itself insecure.

LENDER'S RIGHTS.  Upon default or upon demand, the Lender may declare the
entire unpaid principal balance on this Note and all accrued unpaid
interest immediately due, and then Borrower will pay that amount.

COLLATERAL.  Borrower acknowledges this Note is secured by all security
agreements, guarantees, mortgages, and other security instruments
previously granted, contemporaneously granted, and granted in the future,
and it has the collateral and other rights all as contained in a certain
confirmation agreement dated May 10, 2004 between all parties contained
therein, and as subsequently amended and updated from time to time.

ATTORNEYS' FEES; EXPENSES.  Lender may hire or pay someone else to help
collect this Note if Borrower does not pay.  Borrower will pay Lender
that amount.  This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses, whether or not
there is a lawsuit, including attorneys' fees, expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals.  If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by
law.

GOVERNING LAW.  This Note will be governed by, construed and enforced in
accordance with the laws of the State of Wisconsin.  This Note has been
accepted by Lender in the State of Wisconsin.

<PAGE>

OTHER LOAN AGREEMENTS.  If Borrower and Lender have either previously or
contemporaneously entered into a Loan or Confirmation Agreements, it is
agreed that this Note is subject to the terms and conditions of such Loan
or Confirmation Agreements.  For purpose of this provision, Loan or
Confirmation Agreements shall include, but not be limited to, a Business
Loan Agreement or any other Loan or Confirmation Agreements.

SUCCESSOR INTERESTS.  The terms of this Note shall be binding upon
Borrower, and upon Borrower's successors and assigns, and shall inure to
the benefit of Lender and Lender's heirs, executors, administrators,
successors and assigns.

GENERAL PROVISIONS.  This Note benefits Lender and its successors and
assigns, and binds Borrower and Borrower's successors, assigns, and
representatives.  Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them.  Borrower and any other
person or corporation who signs, guarantees or endorses this Note, to the
extent allowed by law, waive presentment, demand for payment, and notice
of dishonor.  Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability.  All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any
party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to an
yone.  All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom
the modification is made.  The obligations under this Note are joint and
several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY
NOTE.

BORROWER:

COMMERCE GROUP CORP.

/s/ Edward L. Machulak

______________________________________________
By:  Edward L. Machulak, President


/s/ Edward A. Machulak
_____________________________________________________
By:  Edward A. Machulak, Vice President and Secretary



<PAGE>


                          Exhibit C to Exhibit 99.3

                                Assignment

     For and in consideration of the sum of One Dollar ($1.00) and other
good and valuable consideration such as, but not limited to, the
continuance of extending the existing substituted, consolidated
open-ended, secured, on-demand promissory note(s) issued by Commerce
Group Corp. (Commerce), a Wisconsin corporation located at 6001 North
91st Street, Milwaukee, Wisconsin  53225, in hand paid, the receipt of
which is hereby acknowledged, Commerce does hereby sell, assign and
transfer to General Lumber & Supply Co., Inc., a Wisconsin corporation,
Edward L. Machulak, as an individual and not as a Director or Officer of
Commerce, the Edward L. Machulak Rollover Individual Retirement Account,
the Sylvia Machulak Rollover Individual Retirement Account, and Sylvia
Machulak, as an individual, and their heirs, executors, administrators,
successors and assigns, all who reside in the  County of Milwaukee, State
of Wisconsin, United States of America, individually and collectively
referred to as "Le nders," all of Commerce's rights, titles, claims,
remedies, and interests whatsoever in and to the exploration concession
identified as the Nueva Esparta Exploration Concession/License which was
granted by the Office of the Government of El Salvador Ministry of
Economy's office and the Director of Hydrocarbons and Mines under its
Resolution No. 271 dated May 28, 2004 (delivered June 4, 2004) to
Commerce Group Corp. consisting of an area of 45 square kilometers
identified as Cartographic Sheet Number 2657-111 (scale 1:50000) located
in the municipality of Santa Rosa de Lima, in the Departments of Morazan
and La Union, Republic of El Salvador, Central America, and more fully
described in the attached Spanish and English Resolution No. 271 (Exhibit
1) which is made an integral part of this assignment.

     Said claims, rights, title and interest are pledged, sold, assigned
and transferred to the Lenders as collateral security for loans made and
for loans to be made by the Lenders to Commerce and also as collateral
security for any and all liabilities, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising from
Commerce to the Lenders.

     Commerce further acknowledged that Commerce's Directors unanimously
adopted this Assignment by a resolution on May 9, 2005, and that the
purpose of this Assignment is to provide additional collateral to the
above-described Lenders.

     This Assignment shall extend to the full term remaining on the above
concession and license or lease and in any amendments, renewals, changes
or extensions thereof.

     In Witness Whereof, Commerce has caused this instrument to be
signed, sealed and delivered by its proper officers thereunto duly
authorized this 9th day of May 2005.

ATTEST:

COMMERCE GROUP CORP.                  COMMERCE GROUP CORP.

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

-----------------------------         -----------------------------
Edward L. Machulak, President         Edward A. Machulak, Secretary


State of Wisconsin  )
                    )  ss.
County of Milwaukee )

     On this 9th day of May, 2005, before me, personally appeared Edward
L. Machulak, President and Edward A.  Machulak, Secretary of Commerce
Group Corp., to me known to be the persons described in, and who executed
the foregoing instrument, and acknowledged that they executed the same as
their free act and deed.

                                      /s/ Sylvia Machulak
                                      -----------------------------------
                                      Sylvia Machulak
                                      Notary Public, Milwaukee County, WI
                                      My commission expires June 11, 2006

<PAGE>

                  Exhibit 1 to Exhibit C of Exhibit 99.3

             [English translation of attached Spanish document.]

MINISTRY OF ECONOMY
Republic of El Salvador

                             RESOLUTION No. 271

Ministry of Economy:  San Salvador, at 9:05 AM of the day May 25, 2004.

In view of the Recourse of Appeal introduced into the Directorate of
Hydrocarbons and Mines, on December 19, 2003, before the Minister of
Economy, by Sr. Jose Antonio Alfaro Castro, Lawyer, of this domicile,
acting in his capacity of General Power of Attorney for the Company
"COMMERCE GROUP CORP" of this domicile, against Resolution No. 178 issued
at 14:10 on December 1, of the same year by the cited Directorate, that
declares without standing the request for Exploration License that later
on will say, and,

HAVING READ THE ARGUMENTS AND CONSIDERING:

I.   That through the referenced Resolution the Directorate of
     Hydrocarbons and Mines of this Ministry declared without standing
     the Minerals Exploration License especially for gold an silver that
     Dr. Jose Antonio Alfaro Castro requested in the name of his
     mentioned grantor of Power on October 30, 2002 for the area called
     NUEVA ESPARTA for a surface extension of 45 square kilometers
     identified in cartographic sheet number 2657-III, scale 1 : 50,000
     located in the municipality of Santa Rosa de Lima, in the
     Departments of Morazan and La Union respectively.

II.  That having admitted the Recourse, the files were transferred to the
     Secretary of State with prior notification to the referenced Company
     and receiving it, was sent to be heard for the term of the Law, on
     completing the hearing through the mentioned Power holder, expressed
     that based on Article 45 second line item in the Mining Law, he
     requested an opening of proofs, which was done and as well the
     applicant presented a document in which he stated that the
     Directorate of Hydrocarbons and Mines on issuing the referenced
     Resolution founded it on the following arguments: a) little
     geological investigation of the exploitation program presented
     (SIC); b) lack of sufficient technical capacity to develop the
     project on the part of the professionals proposed by the applying
     Company; c) That the applying Company did not fulfill the
     requirements in the first line item of Article 9 of the Mining Law;
     requirements that refer to the technical and financial capacity to
     develop mining projects.

<PAGE>

III. That in the referred to period of Proof, the applicant presented a
     new work plan prepared by known technicians in the material, in
     which a program of activities is reflected that complies with the
     requirements for this kind of project to be developed in the first
     four years by stages, projecting activities like geological mapping,
     opening of trenches, geochemistry, laboratory analysis; and the
     costs of investment in each stage.  Presenting besides, the
     documents that contain the names of the companies that will
     participate in the Project; as well as the CV's of the companies
     that will participate in it, and the CV's of the technicians in the
     material that have the required qualifications, and the chart of
     investment, costs and expenses of the applying company, copy of the
     correspondence in which is sketched the financial capacity, in which
     for now the invested money has been for the payment of
     administrative expenses and in a lesser scale for investment in
     exploration, referring that it will be increased as reflected in the
     related project; with that it proves compliance with what is
     established in article 9 of the Mining Law.  That with what is
     explained and with the documental proof that is presented, it
     overcomes the deficiencies expressed by the Directorate for
     Hydrocarbons and Mines, who asks that the Declaration Without
     Standing be reconsidered and grant the Exploration License
     requested.

IV.  Upon analyzing the resolution that is impugned, it is warned that in
     it conclusions were expressed in the sense that: " a) little
     geological investigation of the exploitation (sic) program
     presented"; b) "lack of technical capacity sufficient to develop the
     project on the part of the professionals proposed by the requesting
     company", without the argumentation, the criteria or the factual
     reasons being laid out in it that allows any analysis to arrive to
     said conclusions, therefore the reasoning is completely transparent
     in regard to valuing the documents presented with the application.


V.   Consequent with what is expressed, in matters of Exploration
     Licenses it is necessary to understand:  That the text and spirit
     with which the Mining Law was issued, just as it was established in
     the Considering and in its articles 8 and 9, was that of granting
     Exploration Licenses and subsequently a concession for the
     exploration of minerals, to those companies that carry out this
     activity through the application of modern systems that allow fully
     to take advantage of the minerals, having conditioned as a
     requirement to acquire mining rights, the ideal; determining as
     ideal those who proved to have the technical and financial capacity
     to develop mining projects;  that on reviewing the documents
     presented by the appellant as proof are: the new work plan for the
     Nueva Esparta Exploration project; program of exploration for the
     mining project, the program to be developed in four years and in
     four stages, one per year; letter and summary of Financial
     Statements, report of the Public A ccountant of the investment,
     costs and expenses made since January 1, 1999 to June 30, 2003,
     certified Balance Sheets and Financial Statements by

<PAGE>

     the Public Auditor, documentation that has value as proof.  With
     respect to the technical capacity, the names of companies are
     presented with letters of commitment that they will work in the
     exploitation; and curriculum vitae of the technicians that will
     participate in the project. From the latter it is concluded that the
     applying company indeed has a geological exploration project for an
     area with mining background and counts with technical personnel with
     technical capacity to develop the project, for which reason this
     Ministry considers that the applying company complies with the
     requirements that for that purpose the Law establishes in article 9,
     such as having technical and financial capacity to develop the
     mining project and resolves the recourse (of appeal) presented has
     standing.

Therefore,

In use of my legal faculties and based on what is established in Article
45 of the Mining Law and the considerations expressed;

RESOLVE:

1.  The Recourse of Appeal presented December 19, 2003 by Dr. Jose
    Antonio Alfaro Castro in his capacity as Power of Attorney for the
    Company COMMERCE GROUP CORP has standing; and leaves without effect
    Resolution 178 issued by the Directorate of Hydrocarbons and Mines of
    this Ministry at 14:00 hours of the day December 1, 2003.

2.  Returns the present archives to their place of origin to the end of
    granting the License requested.

3.  The Directorate of Mines and Hydrocarbons will proceed to carry out
    the corresponding monitoring to the end of assuring the fulfillment
    of the obligations on the part of the beneficiary under the pain of
    applying the sanctions that are legally applicable.

                             MIGUEL E. LACAYO
                                MINISTER

                    [Seal of the Ministry of Economy]



MINISTERIO DE ECONOMIA
Republica de El Salvador, C.A.


                              RESOLUCION No. 271

MINISTERIO DE ECONOMIA:   San Salvador, a las nueve horas con cinco
minutos del dia venticinco de mayo de dos mil cuatro.

Visto el Recurso de Apelacion interpuesto en la Direccion de
Hidrocarburos y Minas, el diecinueve de diciembre de 2003, para ante el
Ministro de Economia, por el Doctor Jose Antonio Alfaro Castro, Abogado
de esta domicilio, actuando como apoderado de la Sociedad COMMERCE GROUP
CORP., en contra de la Resolucion No. 178 emitada a catorce horas con
diez minutos del uno de diciembre del mismo ano de la citada Direccion,
que declara sin lugar solicitud de Licencia de Explotacion que adelante
se dira y,

LEIDOS LOS AUTOS Y CONSIDERANDO:

I.    Que mediante la Resolucion recurrida, la Direccion de Hidrocarburos
      y Minas de este Ministerio, declaro sin lugar la Licencia de
      Exploracion de Minerales especialmente oro y plata que en nombre de
      su mencionado poderdante solicito el Doctor Alfaro Castro, el 30 de
      octubre del 2002, en el area denominada NUEVA ESPARTA, de una
      extension superficial de 45 kilometros cuadrados, identificada en
      la hoja cartografica numero 2657-III escala 1:50 ubicada, en los
      municipios de Sociedad y Santa Rosa de Lima, en los departamentos
      de Morazan y La Union respectivamente.

II.   Que admitido el Recurso, fueron trasladadas las diligencias a esta
      Secretaria de Estado, previa notificacion a la Sociedad recurrente;
      y recibidas las mismas se le mando a oir por el termino de Ley,
      quien al evacuar la audiencia por medio del mencionado Apoderado,
      expreso que en base al articulo 45 inciso segundo de la Ley de
      mineria, solicitaba se abriera a pruebas; por lo que asi se hizo, y
      en el mismo, el recurrente presento un escrito en el que manifiesta
      que la Direccion de Hidrocarburos y Minas al emitir la Resolucion
      recurrida, la fundamento en los argumentos siguientes:  a) poca
      investigacion geologica del programa de explotacion presentado;  b)
      falta de capacidad tecnica suficiente para desarrollar el proyecto
      de parte de los profesionales propuestos por la sociedad
      solicitante; c) Que la Sociedad solicitante no llena los requisitos
      senalados en el inciso primero del articulo 9 de la Ley de Mineria;
      requisitos que se refiere a la capacidad tecnica y financiera para
      desar rollar proyectos mineros.

<PAGE>

III.  Que en el referido periodo de Prueba, el recurrente presento un
      nuevo plan de trabajo elaborado por tecnicos conocedores de la
      materia en donde se refleja un programa con actividades que cumplen
      los requisitos para esta clase proyectos a desarrollar en los
      primeros cuatro anos por etapas, proyectando actividades como mapeo
      geologico, apertura de trincheras geoquimicas, analisis de
      laboratorio; y los costos de inversion en cada etapa.  Presentando
      ademas los documentos que contienen los nombres de las empresas que
      participaran en el Proyecto, asi como los curriculos de las
      empresas que participaran en el mismo, y los curriculos de los
      tecnicos en la materia que reunen los requisitos requeridos, y el
      cuadro de inversion, costos y gastos de la Sociedad solicitante,
      copia de correspondencia en donde se esboza la capacidad
      financiera, en la cual por ahora, el dinero invertido ha sido para
      el pago de gastos administrativos y en menos escala para inversion
      en exploracion refiriendo que se aumentara como se refleja en el
      proyecto relacionado:  con lo que comprueba darle cumplimiento a lo
      que establece el articulo 9 de la Ley de Mineria.  Que con lo
      expuesto y la prueba documental que presenta superan las
      deficiencias expresadas por la Direccion de Hidrocarburos y Minas y
      se pide se reconsidera la Declaratoria sin lugar y se otorgue la
      Licencia de exploracion solicidata.

IV.   Al analizar la resolucion que se impugna, se advierte que en la
      misma se expresaron conclusiones en el sentido que:  "a) poca
      investigacion geologica del programa de explotacion presentado; b)
      falta de capacidad tecnica suficiente para desarrollar el proyecto
      de parte de los profesionales propuestos por la sociedad
      solicitante," sin que se expongan en la misma, la argumentacion,
      los criterios o razones facticas que permitan en cualquier
      analisis, llegar a dichas conclusiones, de manera que el
      razonamiento sea completamente transparente en cuanto a la
      valoracion de los documentos presentados con la solicitud.

V.    Consecuente con los expuesto en materia de Licencias de Exploracion
      ha de entenderse:  Que el texto y el espiritu con que se emitio la
      Ley de Mineria, tal como se dejo establecido en el considerando I y
      articulo 8 y 9 de la misma, fue la de otorgar Licencias de
      Exploracion y subsiguiente concesion para la Exploracion de
      Minerales, a aquellas empresas que realicen esa actividad mediante
      la aplicacion de sistemas modernos que permitan el aprovechamiento
      integral de los minerales, habiendo condicionado como requisito
      para adquirir derechos mineros, la idonidad; determinado como
      idoneas quienes comprobaran tener capacidad tecnica y capacidad
      financiera para desarrollar proyectos mineros:  que al revisar los
      documentos presentados por el apelante como prueba, son nuevo plan
      de trabajo de proyecto de exploracion Nueva Esparta, programa de
      exploracion del proyecto minero, el programa a desarrollar en los
      cuatro anos en cuatro etapas, una por ano:  carta y resumen de
      Estados Financieros, informe de Contador Publico de la inversion,
      costos, y gastos efectuados desde el 01 de enero de 1999 al 30 de
      junio de 2003, Balance y Estados Financieros certificados por

<PAGE>

      Auditor Publico, documentacion que tiene valor probatorio.
      Respecto a la capacidad tecnica presenta los nombres de empresas
      con cartas compromiso de que trabajaran en la exploitacion
      curriculun vitae de los tecnicos que participaran en el proyecto.
      De lo antes expuesto se concluye que la empresa solicitante si
      tiene un proyecto de exploracion geologica para un area con
      antecedentes mineros, y cuenta con personal tecnico con capacidad
      para desarrollar el proyecto, por lo que este Ministerio considera
      que la Sociedad solicitante cumple con las exigencias que  al
      efecto establece la Ley en el articulo 9, como es el tener
      capacidad tecnica y financiera para desarrollar el proyecto minero
      y resuelve ha lugar al recurso interpuesto.

Por tanto,

En uso de mis facultades legales, y con base a lo establecido en el Art.
45 de la Ley de Mineria y las consideraciones expuestas.

RESUELVO:

1.  Ha lugar el recurso de Apelacion interpuesto el 19 de diciembre de
    dos mil tres, por el Doctor Alfaro Castro en calidad de Apoderado de
    la Sociedad COMMERCE GROUP CORP.; y Dejase sin efecto la
    resolucion178 emitada por la Direccion de Hidrocarburos y Minas de
    este Ministerio, a las catorce hora del dia uno de diciembre de dos
    mil tres.

2.  Vuelvan las presentes diligencias a su lugar de origen a fin que se
    otorgue la licencia solicitada.

3.  La Direccion de Minas e Hidrocarburos procecera a realizar el
    moniloreo correspondiente, a fin de asegurar el cumplimiento de las
    obligaciones por parte del beneficiario so pena de aplicar las
    sanciones que legalmente sean procedentes.

                 Firma por:  MIGUEL E. LACAYO, MINISTRO