EXHIBIT 99.4
                                                           COMMERCE GROUP CORP.
                                  6001                         North        91st
                                                               Street,
                                                               Milwaukee,     WI
                                                               53225-1795
                                                               414/462-5310  Fax
                                                               414/462-5312
                                                               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 14, 2001



Mrs. Sylvia Machulak as an
Individual and for her Rollover
Individual Retirement Account
903 West Green Tree Road
River Hills, Wisconsin  53217

Dear Mrs. Machulak:

At today's Commerce Group Corp.  (Commerce)  Directors'  meeting,  the Directors
were  informed  about the  confirmation  and status  letter you  requested  from
Commerce  and its  affiliates  to  establish  and confirm the amount due and the
collateral pledged to the Sylvia Machulak Rollover  Retirement Account (SM RIRA)
as of Commerce's fiscal year ended March 31, 2001. Today,  Commerce's  Directors
approved,  ratified and confirmed the contents of this letter and  authorized me
to authenticate  and confirm the outstanding  obligations due to Sylvia Machulak
as an  individual/consultant  and the SM RIRA as of Commerce's fiscal year ended
March 31, 2001, which are as follows:

1.       Promissory Notes and Other Obligations

         A series of open-ended, secured, on-demand promissory notes (Notes) are
         due to the SM RIRA.  Their  combined  amount is $312,459.27 as of March
         31, 2001. These Notes bear interest, payable monthly, at the rate of 3%
         over the prime rate established from time to time by the First National
         Bank of Chicago,  Chicago,  Illinois, (now Bank One), but not less than
         16% per annum.  (Schedule  of  Principal  and  Interest as of March 31,
         2001, Exhibit A)





  2.     Amounts Due to Sylvia Machulak as an Individual (SM)

         As of  September  30,  2000, a sum of $201,600 (72 months at $2,800 per
         month) is due to  Sylvia  Machulak  for  consulting  services  rendered
         pursuant  to a Director  resolution  adopted on October 20,  2000.  The
         Directors further acknowledge the continuance of SM's services at a sum
         of $3,000 per month beginning on October 1, 2000, and continuing  until
         such time as terminated by the Directors or the  President.  Therefore,
         the amount due to SM as of March 31,  2001,  is $219,600  (72 months at
         $2,800  and six  months  at  $3,000).  Reference  is made to  Exhibit B
         included in the April 5, 1996  confirmation  letter.  On  December  14,
         1996,  Commerce  issued  a  four-year  stock  option  to the SM RIRA to
         purchase 83,000 of its restricted common shares at a price of $3.00 per
         share.  This  option  was not  exercised  on or  before  the due  date,
         therefore, it expired. (Reference is made to Exhibit B in the April 14,
         1997 confirmation letter.)

  3.      Transactions During the Fiscal Year with the SM RIRA, Commerce,
 and its Subsidiaries

         On August 14, 2000, the Directors,  in order to reduce  corporate debt,
         authorized  the  Officers of the Company to  negotiate  the sale of its
         non-income  producing  assets  to the  SM  RIRA  in  exchange  for  the
         reduction of debt owed to the SM RIRA.  It was agreed to sell to the SM
         RIRA,  43  parcels  of land  located  in the  San  Luis  North  Estates
         Subdivision,  Costilla County,  Colorado, for a sum of $64,500; 12 lots
         consisting of approximately one acre located in Fort Garland,  Colorado
         for the sum of $6,000;  and 250,000 of the Company's  restricted common
         shares  at a  price  of  $.25  a  share  or  $62,500.  Pursuant  to the
         Directors' resolution,  the following  transactions were concluded:  on
         October 3, 2000, the SM RIRA  consummated  the purchase of the Costilla
         County parcels of land as described above; and on December 7, 2000, the
         SM RIRA purchased 250,000 of the Company's  restricted common shares at
         a price of $.25 a share.










  4.      Collateral Pledged to the SM RIRA

         The collateral specifically pledged to the SM RIRA is as follows:

         a.       A Deed of Trust  executed by SLE on July 16, 1982,  consisting
                  of 12 lots  located  in the  Town of  Fort  Garland,  Costilla
                  County,  Colorado,  and recorded at 8:45 a.m. on May 18, 1984,
                  in Book 237, Page 658, Reception No. 156287. Reference is made
                  to Exhibit 2 in the April 9, 1990 confirmation  letter.  These
                  lots are included in the purchase  consummated  by the SM RIRA
                  pursuant to the Directors' approval dated August 14, 2000.

         b.       A Deed of Trust executed by SLE on May 27, 1983, consisting of
                  32 lots  located  in the San Luis North  Estates  Subdivision,
                  Costilla  County,  Colorado,  and recorded at 9:30 a.m. on May
                  31, 1983, in Book 709, Reception No. 152520. Reference is made
                  to Exhibit 3 in the April 9, 1990 confirmation  letter.  These
                  and  other  lots were  purchased  by the SM RIRA  pursuant  to
                  Directors' approval dated August 14, 2000.

         c.       A Collateral Pledge Agreement executed by Commerce on December
                  31, 1981  granted to the SM RIRA by Commerce  pledging  48,645
                  SLE common shares,  par value $0.50 a share,  Certificate  No.
                  25, dated December 31, 1981,  together with a letter agreement
                  dated December 31, 1981. Reference is made to Exhibit 4 in the
                  April 9, 1990 confirmation letter.

         d.        General Lumber & Supply Co., Inc.  (GLSCO),  Edward L.
 Machulak  (ELM), as an individual and not
                  as a Director  or Officer of  Commerce  the Edward L.
 Machulak  Rollover  Individual  Retirement
                  Account (ELM RIRA) and the 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 mine  concession  which was 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  all of  the  San
Sebastian  Gold  Mine  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
 4(a)  included  in the  April  9,  1990
                  confirmation  letter.  Effective  February 1996, the
 Government of El Salvador approved a revised
                  version of the mining law.  Therefore,  Commerce  applied
 for the San Sebastian  Gold Mine mining
                  concession   applicable   to  this  mining  law.   This
 concession  is  subject  to  compliance
                  requirements  which have been  presented to the El Salvador
 Director of Mines and  Hydrocarbons.
                  Therefore,  it is clearly understood that this concession,
 and all of the rights thereunder,  in
                  addition  to the  concession  granted on July 23,  1987,
together  with all  precious  metal ore
                  reserves, is pledged as collateral to all of the parties
herein mentioned.

5.       Cross Pledge Collateral Agreement

         GLSCO,  ELM, the ELM RIRA and the SM RIRA  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,
         GLSCO,  ELM,  the ELM RIRA and the SM RIRA 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 and the SM RIRA.  The  purpose  and the  intent  of the  cross
         pledge of collateral  is to assure GLSCO,  ELM, the ELM RIRA and the SM
         RIRA,  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 and the SM RIRA,  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
         derived from the excess  collateral  and then the amount due to each of
         them would be distributed accordingly.

6.       Cancellation of Inter-Company Debts Upon Default

         Since part of the  collateral  pledged to GLSCO,  ELM, the ELM RIRA and
         the SM RIRA is 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.

7.       Guarantors

         This agreement  further confirms that Commerce and all of the following
         are  guarantors  to the loans  made by the SM RIRA to  Commerce:  Joint
         Venture,  Homespan,  Ecomm,  SLE,  Sanseb  and UDI.  They  jointly  and
         severally  guarantee  payment of the note(s)  that they 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 and the SM RIRA.  Reference is made
         to Exhibit 5 included in the April 9, 1990 confirmation letter.

8.        Re-Execution Agreement

         In the event the SM RIRA deems that it is necessary  or  advisable  for
         the SM RIRA to have Commerce  re-execute any document(s)  entered into,
         including,  but  not  limited  to the  promissory  note  or  collateral
         agreement,   Commerce  will  re-execute  such  document(s)   reasonably
         required by the SM RIRA.  Commerce also  acknowledges that Commerce may
         be liable  to pay  certain  costs  related  to any of the  transactions
         entered  into  with  the SM  RIRA.  If at a  later  date  the  SM  RIRA
         determines  that an error has been made in the payment of such costs to
         the SM RIRA,  then the SM 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 SM  RIRA's  written
         request.  The failure of Commerce to comply with Commerce's  obligation
         hereunder  shall  constitute a default and shall entitle the SM RIRA to
         the  remedies  available  for  default  under  any  provisions  of  the
         agreements including, but not limited to the promissory note and/or the
         collateral pledge agreement.

9.        Omissions

         Commerce  believes that it has included all of its obligations,  monies
         due and has listed all of the collateral  due to the SM 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  with this  confirmation
         and 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>



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. Designe   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:                                                  Accepted by:

/s/ Sylvia Machulak                                      /s/ Sylvia Machulak
------------------------------------        ------------------------------------
Sylvia Machulak Rollover Individual         Sylvia Machulak as an individual
Retirement Account                                         Date:  May 14, 2001
Date:  May 14, 2001




<PAGE>


                                                 Exhibit A to Exhibit 99.4
                 (Schedule of Principal and Interest as of March 31, 2001
                       has been purposely omitted as it only reflects
                          the calculations of the principal and interest.)