diff --git a/Makefile b/Makefile
index 3a98f65aeeb..0ea26956dff 100644
--- a/Makefile
+++ b/Makefile
@@ -114,6 +114,8 @@ orderer-docker: build/image/orderer/$(DUMMY)
 configtxgen: GO_TAGS+= nopkcs11
 configtxgen: build/bin/configtxgen
 
+javaenv: build/image/javaenv/$(DUMMY)
+
 buildenv: build/image/buildenv/$(DUMMY)
 
 build/image/testenv/$(DUMMY): build/image/buildenv/$(DUMMY)
diff --git a/core/chaincode/chaincodetest.yaml b/core/chaincode/chaincodetest.yaml
index a31757eb44f..99bd613af13 100644
--- a/core/chaincode/chaincodetest.yaml
+++ b/core/chaincode/chaincodetest.yaml
@@ -139,8 +139,8 @@ logging:
     status:    warning
     stop:      warning
     login:     warning
-    vm:        warning
-    chaincode: warning
+    vm:        debug
+    chaincode: debug
 
 
 ###############################################################################
@@ -331,7 +331,7 @@ vm:
                 file: /path/to/ca.pem
             key:
                 file: /path/to/server-key.pem
-
+        attachStdout: true
 ###############################################################################
 #
 #    Chaincode section
@@ -361,10 +361,24 @@ chaincode:
         # of platforms are expanded.  For now, we can just use baseos
         runtime: $(BASE_DOCKER_NS)/fabric-baseos:$(ARCH)-$(BASE_VERSION)
 
+    java:
+        # This is an image based on java:openjdk-8 with addition compiler
+        # tools added for java shim layer packaging.
+        # This image is packed with shim layer libraries that are necessary
+        # for Java chaincode runtime.
+        Dockerfile:  |
+            from $(DOCKER_NS)/fabric-javaenv:$(ARCH)-$(PROJECT_VERSION)
+
     # timeout in millisecs for starting up a container and waiting for Register
     # to come through. 1sec should be plenty for chaincode unit tests
     startuptimeout: 1000
 
+    # timeout in millisecs for invokes and initialize commands
+    # this timeout is used by all chaincodes in all the channels including
+    # system chaincodes. Default is 30000ms (30 seconds)
+    executetimeout: 30000
+
+
     #timeout in millisecs for deploying chaincode from a remote repository.
     deploytimeout: 60000
 
@@ -393,6 +407,8 @@ chaincode:
         escc: enable
         vscc: enable
 
+    logLevel: debug
+
 ###############################################################################
 #
 #    Ledger section - ledger configuration encompases both the blockchain
diff --git a/core/chaincode/exectransaction_test.go b/core/chaincode/exectransaction_test.go
index 91ec368fc8a..e6a825c8aad 100644
--- a/core/chaincode/exectransaction_test.go
+++ b/core/chaincode/exectransaction_test.go
@@ -19,6 +19,7 @@ package chaincode
 import (
 	"encoding/json"
 	"fmt"
+	"math/rand"
 	"net"
 	"os"
 	"path/filepath"
@@ -317,7 +318,7 @@ func deploy2(ctx context.Context, cccid *ccprovider.CCContext, chaincodeDeployme
 
 // Invoke a chaincode.
 func invoke(ctx context.Context, chainID string, spec *pb.ChaincodeSpec, blockNumber uint64) (ccevt *pb.ChaincodeEvent, uuid string, retval []byte, err error) {
-	return invokeWithVersion(ctx, chainID, "0", spec, blockNumber)
+	return invokeWithVersion(ctx, chainID, spec.GetChaincodeId().Version, spec, blockNumber)
 }
 
 // Invoke a chaincode with version (needed for upgrade)
@@ -569,13 +570,13 @@ func checkFinalState(cccid *ccprovider.CCContext) error {
 }
 
 // Invoke chaincode_example02
-func invokeExample02Transaction(ctxt context.Context, cccid *ccprovider.CCContext, cID *pb.ChaincodeID, args []string, destroyImage bool) error {
+func invokeExample02Transaction(ctxt context.Context, cccid *ccprovider.CCContext, cID *pb.ChaincodeID, chaincodeType pb.ChaincodeSpec_Type, args []string, destroyImage bool) error {
 
 	var nextBlockNumber uint64
 
 	f := "init"
 	argsDeploy := util.ToChaincodeArgs(f, "a", "100", "b", "200")
-	spec := &pb.ChaincodeSpec{Type: 1, ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: argsDeploy}}
+	spec := &pb.ChaincodeSpec{Type: chaincodeType, ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: argsDeploy}}
 	_, err := deploy(ctxt, cccid, spec, nextBlockNumber)
 	nextBlockNumber++
 	ccID := spec.ChaincodeId.Name
@@ -598,7 +599,7 @@ func invokeExample02Transaction(ctxt context.Context, cccid *ccprovider.CCContex
 
 	f = "invoke"
 	invokeArgs := append([]string{f}, args...)
-	spec = &pb.ChaincodeSpec{Type: 1, ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: util.ToChaincodeArgs(invokeArgs...)}}
+	spec = &pb.ChaincodeSpec{ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: util.ToChaincodeArgs(invokeArgs...)}}
 	_, uuid, _, err := invoke(ctxt, cccid.ChainID, spec, nextBlockNumber)
 	nextBlockNumber++
 	if err != nil {
@@ -614,7 +615,7 @@ func invokeExample02Transaction(ctxt context.Context, cccid *ccprovider.CCContex
 	// Test for delete state
 	f = "delete"
 	delArgs := util.ToChaincodeArgs(f, "a")
-	spec = &pb.ChaincodeSpec{Type: 1, ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: delArgs}}
+	spec = &pb.ChaincodeSpec{ChaincodeId: cID, Input: &pb.ChaincodeInput{Args: delArgs}}
 	_, _, _, err = invoke(ctxt, cccid.ChainID, spec, nextBlockNumber)
 	if err != nil {
 		return fmt.Errorf("Error deleting state in <%s>: %s", cccid.Name, err)
@@ -623,34 +624,56 @@ func invokeExample02Transaction(ctxt context.Context, cccid *ccprovider.CCContex
 	return nil
 }
 
+const (
+	chaincodeExample02GolangPath = "github.com/hyperledger/fabric/examples/chaincode/go/chaincode_example02"
+	chaincodeExample02JavaPath   = "../../examples/chaincode/java/chaincode_example02"
+	chaincodeExample06JavaPath   = "../../examples/chaincode/java/chaincode_example06"
+)
+
 func TestExecuteInvokeTransaction(t *testing.T) {
-	chainID := util.GetTestChainID()
 
-	lis, err := initPeer(chainID)
-	if err != nil {
-		t.Fail()
-		t.Logf("Error creating peer: %s", err)
+	testCases := []struct {
+		chaincodeType pb.ChaincodeSpec_Type
+		chaincodePath string
+	}{
+		{pb.ChaincodeSpec_GOLANG, chaincodeExample02GolangPath},
+		{pb.ChaincodeSpec_JAVA, chaincodeExample02JavaPath},
 	}
 
-	defer finitPeer(lis, chainID)
+	for _, tc := range testCases {
+		t.Run(tc.chaincodeType.String(), func(t *testing.T) {
 
-	var ctxt = context.Background()
+			chainID := util.GetTestChainID()
 
-	cccid := ccprovider.NewCCContext(chainID, "example02", "0", "", false, nil, nil)
-	url := "github.com/hyperledger/fabric/examples/chaincode/go/chaincode_example02"
-	ccID := &pb.ChaincodeID{Name: "example02", Path: url, Version: "0"}
+			lis, err := initPeer(chainID)
+			if err != nil {
+				t.Fail()
+				t.Logf("Error creating peer: %s", err)
+			}
 
-	args := []string{"a", "b", "10"}
-	err = invokeExample02Transaction(ctxt, cccid, ccID, args, true)
-	if err != nil {
-		t.Fail()
-		t.Logf("Error invoking transaction: %s", err)
-	} else {
-		fmt.Print("Invoke test passed\n")
-		t.Log("Invoke test passed")
+			defer finitPeer(lis, chainID)
+
+			var ctxt = context.Background()
+			chaincodeName := generateChaincodeName(tc.chaincodeType)
+			chaincodeVersion := "1.0.0.0"
+			cccid := ccprovider.NewCCContext(chainID, chaincodeName, chaincodeVersion, "", false, nil, nil)
+			ccID := &pb.ChaincodeID{Name: chaincodeName, Path: tc.chaincodePath, Version: chaincodeVersion}
+
+			args := []string{"a", "b", "10"}
+			err = invokeExample02Transaction(ctxt, cccid, ccID, tc.chaincodeType, args, true)
+			if err != nil {
+				t.Fail()
+				t.Logf("Error invoking transaction: %s", err)
+			} else {
+				fmt.Print("Invoke test passed\n")
+				t.Log("Invoke test passed")
+			}
+
+			theChaincodeSupport.Stop(ctxt, cccid, &pb.ChaincodeDeploymentSpec{ChaincodeSpec: &pb.ChaincodeSpec{ChaincodeId: ccID}})
+
+		})
 	}
 
-	theChaincodeSupport.Stop(ctxt, cccid, &pb.ChaincodeDeploymentSpec{ChaincodeSpec: &pb.ChaincodeSpec{ChaincodeId: ccID}})
 }
 
 // Test the execution of an invalid transaction.
@@ -674,7 +697,7 @@ func TestExecuteInvokeInvalidTransaction(t *testing.T) {
 
 	//FAIL, FAIL!
 	args := []string{"x", "-1"}
-	err = invokeExample02Transaction(ctxt, cccid, ccID, args, false)
+	err = invokeExample02Transaction(ctxt, cccid, ccID, pb.ChaincodeSpec_GOLANG, args, false)
 
 	//this HAS to fail with expectedDeltaStringPrefix
 	if err != nil {
@@ -1509,6 +1532,76 @@ func TestChaincodeInvokesSystemChaincode(t *testing.T) {
 	theChaincodeSupport.Stop(ctxt, cccid, &pb.ChaincodeDeploymentSpec{ChaincodeSpec: spec})
 }
 
+func TestChaincodeInitializeInitError(t *testing.T) {
+	testCases := []struct {
+		name          string
+		chaincodeType pb.ChaincodeSpec_Type
+		chaincodePath string
+		args          []string
+	}{
+		{"NotSuccessResponse", pb.ChaincodeSpec_GOLANG, chaincodeExample02GolangPath, []string{"init", "not", "enough", "args"}},
+		{"NotSuccessResponse", pb.ChaincodeSpec_JAVA, chaincodeExample02JavaPath, []string{"init", "not", "enough", "args"}},
+		{"RuntimeException", pb.ChaincodeSpec_JAVA, chaincodeExample06JavaPath, []string{"runtimeException"}},
+	}
+
+	channelID := util.GetTestChainID()
+
+	for _, tc := range testCases {
+		t.Run(tc.name+"_"+tc.chaincodeType.String(), func(t *testing.T) {
+
+			// initialize peer
+			if listener, err := initPeer(channelID); err != nil {
+				t.Errorf("Error creating peer: %s", err)
+			} else {
+				defer finitPeer(listener, channelID)
+			}
+
+			var nextBlockNumber uint64
+
+			// the chaincode to install and instanciate
+			chaincodeName := generateChaincodeName(tc.chaincodeType)
+			chaincodePath := tc.chaincodePath
+			chaincodeVersion := "1.0.0.0"
+			chaincodeType := tc.chaincodeType
+			chaincodeDeployArgs := util.ArrayToChaincodeArgs(tc.args)
+
+			// new chaincode context for passing around parameters
+			chaincodeCtx := ccprovider.NewCCContext(channelID, chaincodeName, chaincodeVersion, "", false, nil, nil)
+
+			// attempt to deploy chaincode
+			_, err := deployChaincode(context.Background(), chaincodeCtx, chaincodeType, chaincodePath, chaincodeDeployArgs, nextBlockNumber)
+
+			// deploy should of failed
+			if err == nil {
+				t.Fatal("Deployment should have failed.")
+			}
+			t.Log(err)
+
+		})
+	}
+}
+
+func deployChaincode(ctx context.Context, chaincodeCtx *ccprovider.CCContext, chaincodeType pb.ChaincodeSpec_Type, path string, args [][]byte, nextBlockNumber uint64) ([]byte, error) {
+
+	chaincodeSpec := &pb.ChaincodeSpec{
+		ChaincodeId: &pb.ChaincodeID{
+			Name:    chaincodeCtx.Name,
+			Version: chaincodeCtx.Version,
+			Path:    path,
+		},
+		Type: chaincodeType,
+		Input: &pb.ChaincodeInput{
+			Args: args,
+		},
+	}
+
+	result, err := deploy(ctx, chaincodeCtx, chaincodeSpec, nextBlockNumber)
+	if err != nil {
+		return nil, fmt.Errorf("Error deploying <%s:%s>: %s", chaincodeSpec.ChaincodeId.Name, chaincodeSpec.ChaincodeId.Version, err)
+	}
+	return result, nil
+}
+
 var signer msp.SigningIdentity
 
 func TestMain(m *testing.M) {
@@ -1527,3 +1620,18 @@ func TestMain(m *testing.M) {
 	SetupTestConfig()
 	os.Exit(m.Run())
 }
+
+var rng *rand.Rand = rand.New(rand.NewSource(time.Now().UnixNano()))
+
+func generateChaincodeName(chaincodeType pb.ChaincodeSpec_Type) string {
+	prefix := "cc_"
+	switch chaincodeType {
+	case pb.ChaincodeSpec_GOLANG:
+		prefix = "cc_go_"
+	case pb.ChaincodeSpec_JAVA:
+		prefix = "cc_java_"
+	case pb.ChaincodeSpec_NODE:
+		prefix = "cc_js_"
+	}
+	return fmt.Sprintf("%s%06d", prefix, rng.Intn(999999))
+}
diff --git a/core/chaincode/multichains_test.go b/core/chaincode/multichains_test.go
index 3c140418121..6090f453993 100644
--- a/core/chaincode/multichains_test.go
+++ b/core/chaincode/multichains_test.go
@@ -44,7 +44,7 @@ func TestExecuteInvokeOnManyChains(t *testing.T) {
 	args := []string{"a", "b", "10"}
 	for _, c := range chains {
 		cccid := ccprovider.NewCCContext(c, "example02", "0", "", false, nil, nil)
-		err = invokeExample02Transaction(ctxt, cccid, chaincodeID, args, false)
+		err = invokeExample02Transaction(ctxt, cccid, chaincodeID, pb.ChaincodeSpec_GOLANG, args, false)
 		if err != nil {
 			t.Fail()
 			t.Logf("Error invoking transaction: %s", err)
diff --git a/core/chaincode/shim/java/build.gradle b/core/chaincode/shim/java/build.gradle
index 76a1fe207b1..4d9719f15dd 100644
--- a/core/chaincode/shim/java/build.gradle
+++ b/core/chaincode/shim/java/build.gradle
@@ -89,16 +89,21 @@ task copyToLib(type: Copy) {
 
 
 task copyProtos(type:Copy){
-
- from ("${rootDir}/protos/peer"){
-     include '**/chaincode_event.proto'
-     include '**/chaincode.proto'
-     include '**/chaincode_shim.proto'
-     include '**/proposal.proto'
-     include '**/proposal_response.proto'
- }
-    into "${projectDir}/src/main/proto/peer"
-
+    into "peer", {
+        from ("${rootDir}/protos/peer"){
+            include 'chaincode_event.proto'
+            include 'chaincode.proto'
+            include 'chaincode_shim.proto'
+            include 'proposal.proto'
+            include 'proposal_response.proto'
+        }
+    }
+    into "common", {
+        from ("${rootDir}/protos/common"){
+            include 'common.proto'
+        }
+    }
+    into "${projectDir}/src/main/proto"
 }
 
 tasks['build'].mustRunAfter tasks['copyProtos']
@@ -108,6 +113,7 @@ build.finalizedBy(publishToMavenLocal)
 
 dependencies {
     compile 'com.google.protobuf:protobuf-java:3.0.0'
+    compile 'com.google.protobuf:protobuf-java-util:3.0.0'
     compile 'io.grpc:grpc-all:0.13.2'
     compile 'commons-cli:commons-cli:1.3.1'
     compile 'io.netty:netty-tcnative-boringssl-static:1.1.33.Fork21:' + tcnative_classifier
diff --git a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeBase.java b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeBase.java
index 9a9d4da9828..5dbdfe4ba41 100644
--- a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeBase.java
+++ b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeBase.java
@@ -26,12 +26,14 @@
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
 import org.hyperledger.fabric.protos.peer.Chaincode.ChaincodeID;
-import org.hyperledger.fabric.protos.peer.ChaincodeSupportGrpc;
-import org.hyperledger.fabric.protos.peer.ChaincodeSupportGrpc.ChaincodeSupportStub;
 import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage;
 import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type;
+import org.hyperledger.fabric.protos.peer.ChaincodeSupportGrpc;
+import org.hyperledger.fabric.protos.peer.ChaincodeSupportGrpc.ChaincodeSupportStub;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
 
-import com.google.protobuf.ByteString;
+import com.google.protobuf.InvalidProtocolBufferException;
+import com.google.protobuf.util.JsonFormat;
 
 import io.grpc.ManagedChannel;
 import io.grpc.netty.GrpcSslContexts;
@@ -42,209 +44,197 @@
 
 public abstract class ChaincodeBase {
 
-	private static Log logger = LogFactory.getLog(ChaincodeBase.class);
-
-	public abstract String run(ChaincodeStub stub, String function, String[] args);
-//	public abstract String query(ChaincodeStub stub, String function, String[] args);
-	public abstract String getChaincodeID();
-
-	public static final String DEFAULT_HOST = "127.0.0.1";
-	public static final int DEFAULT_PORT = 7051;
-
-	private String host = DEFAULT_HOST;
-	private int port = DEFAULT_PORT;
-	private String hostOverrideAuthority = "";
-	private static final String ROOTCERT_PEM = "/root/certs/rootcert.pem";
-	private boolean tlsEnabled=false;
-
-	private Handler handler;
-	private String id = getChaincodeID();
-
-	private final static String CORE_CHAINCODE_ID_NAME = "CORE_CHAINCODE_ID_NAME";
-	private final static String CORE_PEER_ADDRESS = "CORE_PEER_ADDRESS";
-	private final static String CORE_PEER_TLS_ENABLED = "CORE_PEER_TLS_ENABLED";
-	private final static String CORE_PEER_TLS_SERVERHOSTOVERRIDE = "CORE_PEER_TLS_SERVERHOSTOVERRIDE";
-	
-	// Start entry point for chaincodes bootstrap.
-	public void start(String[] args) {
-	    
-	    	processEnvironmentOptions();
-	    	processCommandLineOptions(args);
-
-		Runnable chaincode = () -> {
-			logger.trace("chaincode started");
-			ManagedChannel connection = newPeerClientConnection();
-			logger.trace("connection created");
-			chatWithPeer(connection);
-			logger.trace("chatWithPeer DONE");
-		};
-		new Thread(chaincode).start();
-	}
-	
-	private void processCommandLineOptions(String[] args) {
-	    Options options = new Options();
-	    options.addOption("a", "peerAddress", true, "Address of peer to connect to");
-	    options.addOption("s", "securityEnabled", false, "Present if security is enabled");
-	    options.addOption("i", "id", true, "Identity of chaincode");
-	    options.addOption("o", "hostNameOverride", true, "Hostname override for server certificate");
-	    try {
-	    	CommandLine cl = new DefaultParser().parse(options, args);
-	    	if (cl.hasOption('a')) {
-	    		host = cl.getOptionValue('a');
-	    		port = new Integer(host.split(":")[1]);
-	    		host = host.split(":")[0];
-	    	}
-	    	if (cl.hasOption('s')) {
-	    		tlsEnabled = true;
-	    		logger.debug("TLS enabled");
-	    		if (cl.hasOption('o')){
-	    			hostOverrideAuthority = cl.getOptionValue('o');
-	    			logger.debug("server host override given " + hostOverrideAuthority);
-	    		}
-	    	}
-	    	if (cl.hasOption('i')) {
-	    		id = cl.getOptionValue('i');
-	    	}
-	    } catch (Exception e) {
-	    	logger.warn("cli parsing failed with exception",e);
-
+    private static Log logger = LogFactory.getLog(ChaincodeBase.class);
+
+    public abstract Response run(ChaincodeStub stub, String function, String[] args);
+
+    public abstract String getChaincodeID();
+
+    public static final String DEFAULT_HOST = "127.0.0.1";
+    public static final int DEFAULT_PORT = 7051;
+
+    private String host = DEFAULT_HOST;
+    private int port = DEFAULT_PORT;
+    private String hostOverrideAuthority = "";
+    private boolean tlsEnabled = false;
+    private String rootCertFile = "/etc/hyperledger/fabric/peer.crt";
+
+    private Handler handler;
+    private String id = getChaincodeID();
+
+    private final static String CORE_CHAINCODE_ID_NAME = "CORE_CHAINCODE_ID_NAME";
+    private final static String CORE_PEER_ADDRESS = "CORE_PEER_ADDRESS";
+    private final static String CORE_PEER_TLS_ENABLED = "CORE_PEER_TLS_ENABLED";
+    private final static String CORE_PEER_TLS_SERVERHOSTOVERRIDE = "CORE_PEER_TLS_SERVERHOSTOVERRIDE";
+    private static final String CORE_PEER_TLS_ROOTCERT_FILE = "CORE_PEER_TLS_ROOTCERT_FILE";
+
+    // Start entry point for chaincodes bootstrap.
+    public void start(String[] args) {
+	processEnvironmentOptions();
+	processCommandLineOptions(args);
+	new Thread(() -> {
+	    logger.trace("chaincode started");
+	    final ManagedChannel connection = newPeerClientConnection();
+	    logger.trace("connection created");
+	    chatWithPeer(connection);
+	    logger.trace("chatWithPeer DONE");
+	}).start();
+    }
+
+    private void processCommandLineOptions(String[] args) {
+	Options options = new Options();
+	options.addOption("a", "peerAddress", true, "Address of peer to connect to");
+	options.addOption("s", "securityEnabled", false, "Present if security is enabled");
+	options.addOption("i", "id", true, "Identity of chaincode");
+	options.addOption("o", "hostNameOverride", true, "Hostname override for server certificate");
+	try {
+	    CommandLine cl = new DefaultParser().parse(options, args);
+	    if (cl.hasOption('a')) {
+		host = cl.getOptionValue('a');
+		port = new Integer(host.split(":")[1]);
+		host = host.split(":")[0];
 	    }
-	}
-	
-	private void processEnvironmentOptions() {
-	    if(System.getenv().containsKey(CORE_CHAINCODE_ID_NAME)) {
-		this.id = System.getenv(CORE_CHAINCODE_ID_NAME);
+	    if (cl.hasOption('s')) {
+		tlsEnabled = true;
+		logger.info("TLS enabled");
+		if (cl.hasOption('o')) {
+		    hostOverrideAuthority = cl.getOptionValue('o');
+		    logger.info("server host override given " + hostOverrideAuthority);
+		}
 	    }
-	    if(System.getenv().containsKey(CORE_PEER_ADDRESS)) {
-		this.host = System.getenv(CORE_PEER_ADDRESS);
+	    if (cl.hasOption('i')) {
+		id = cl.getOptionValue('i');
 	    }
-	    if(System.getenv().containsKey(CORE_PEER_TLS_ENABLED)) {
-		this.tlsEnabled = Boolean.parseBoolean(System.getenv(CORE_PEER_TLS_ENABLED));
-		if(System.getenv().containsKey(CORE_PEER_TLS_SERVERHOSTOVERRIDE)) {
-		    this.hostOverrideAuthority = System.getenv(CORE_PEER_TLS_SERVERHOSTOVERRIDE);
+	} catch (Exception e) {
+	    logger.warn("cli parsing failed with exception", e);
+
+	}
+    }
+
+    private void processEnvironmentOptions() {
+        if (System.getenv().containsKey(CORE_CHAINCODE_ID_NAME)) {
+            this.id = System.getenv(CORE_CHAINCODE_ID_NAME);
+        }
+        if (System.getenv().containsKey(CORE_PEER_ADDRESS)) {
+            this.host = System.getenv(CORE_PEER_ADDRESS);
+        }
+        if (System.getenv().containsKey(CORE_PEER_TLS_ENABLED)) {
+            this.tlsEnabled = Boolean.parseBoolean(System.getenv(CORE_PEER_TLS_ENABLED));
+            if (System.getenv().containsKey(CORE_PEER_TLS_SERVERHOSTOVERRIDE)) {
+                this.hostOverrideAuthority = System.getenv(CORE_PEER_TLS_SERVERHOSTOVERRIDE);
+            }
+            if (System.getenv().containsKey(CORE_PEER_TLS_ROOTCERT_FILE)) {
+                this.rootCertFile = System.getenv(CORE_PEER_TLS_ROOTCERT_FILE);
+            }
+        }
+    }
+
+    public ManagedChannel newPeerClientConnection() {
+	final NettyChannelBuilder builder = NettyChannelBuilder.forAddress(host, port);
+	logger.info("Configuring channel connection to peer.");
+
+	if (tlsEnabled) {
+	    logger.info("TLS is enabled");
+	    try {
+		final SslContext sslContext = GrpcSslContexts.forClient().trustManager(new File(this.rootCertFile)).build();
+		builder.negotiationType(NegotiationType.TLS);
+		if (!hostOverrideAuthority.equals("")) {
+		    logger.info("Host override " + hostOverrideAuthority);
+		    builder.overrideAuthority(hostOverrideAuthority);
 		}
+		builder.sslContext(sslContext);
+		logger.info("TLS context built: " + sslContext);
+	    } catch (SSLException e) {
+		logger.error("failed connect to peer with SSLException", e);
 	    }
+	} else {
+	    builder.usePlaintext(true);
 	}
-
-	public ManagedChannel newPeerClientConnection() {
-		NettyChannelBuilder builder = NettyChannelBuilder.forAddress(host, port);
-		logger.info("Inside newPeerCLientConnection");
-
-		if (tlsEnabled) {
-			logger.info("tls enable");
-			try {
-				SslContext sslContext = GrpcSslContexts.forClient()
-						.trustManager(new File(ROOTCERT_PEM))
-						.build();
-				builder.negotiationType(NegotiationType.TLS);
-				if (!hostOverrideAuthority.equals("")){
-					logger.info("host override " + hostOverrideAuthority);
-					builder.overrideAuthority(hostOverrideAuthority);
-				}
-				builder.sslContext(sslContext);
-				logger.info("context built" + sslContext);
-			} catch (SSLException e) {
-				logger.error("failed connect to peer with SSLException",e);
-			}
-		} else {
-			builder.usePlaintext(true);
+	return builder.build();
+    }
+
+    public void chatWithPeer(ManagedChannel connection) {
+	// Establish stream with validating peer
+	ChaincodeSupportStub stub = ChaincodeSupportGrpc.newStub(connection);
+
+	logger.info("Connecting to peer.");
+
+	StreamObserver<ChaincodeMessage> requestObserver = null;
+	try {
+	    requestObserver = stub.register(new StreamObserver<ChaincodeMessage>() {
+
+		@Override
+		public void onNext(ChaincodeMessage message) {
+		    logger.info("Got message from peer: " + toJsonString(message));
+		    try {
+			logger.info(String.format("[%s]Received message %s from org.hyperledger.java.shim",
+				Handler.shortID(message.getTxid()), message.getType()));
+			handler.handleMessage(message);
+		    } catch (Exception e) {
+			e.printStackTrace();
+			System.exit(-1);
+		    }
 		}
-		return builder.build();
-	}
 
-	public void chatWithPeer(ManagedChannel connection) {
-		// Establish stream with validating peer
-		ChaincodeSupportStub stub = ChaincodeSupportGrpc.newStub(connection);
-
-		StreamObserver<ChaincodeMessage> requestObserver = null;
-		try {
-			requestObserver = stub.register(
-					new StreamObserver<ChaincodeMessage>() {
-
-						@Override
-						public void onNext(ChaincodeMessage message) {
-							try {
-								logger.debug(String.format("[%s]Received message %s from org.hyperledger.java.shim",
-										Handler.shortID(message.getTxid()), message.getType()));
-								handler.handleMessage(message);
-							} catch (Exception e) {
-								e.printStackTrace();
-								System.exit(-1);
-								//TODO
-        							// } else if (err != nil) {
-        							//    logger.Error(fmt.Sprintf("Received error from server: %s, ending chaincode stream", err))
-        							//    return
-        							// } else if (in == nil) {
-        							//      err = fmt.Errorf("Received nil message, ending chaincode stream")
-        							// 	    logger.debug("Received nil message, ending chaincode stream")
-        							// 	    return
-							}
-						}
-
-						@Override
-						public void onError(Throwable e) {
-							logger.error("Unable to connect to peer server: "+ e.getMessage());
-							System.exit(-1);
-						}
-
-						@Override
-						public void onCompleted() {
-							connection.shutdown();
-							handler.nextState.close();
-						}
-					});
-		} catch (Exception e) {
-			logger.error("Unable to connect to peer server");
-			System.exit(-1);
+		@Override
+		public void onError(Throwable e) {
+		    logger.error("Unable to connect to peer server: " + e.getMessage());
+		    System.exit(-1);
 		}
 
-		// Create the org.hyperledger.java.shim handler responsible for all control logic
-		handler = new Handler(requestObserver, this);
-
-		// Send the ChaincodeID during register.
-		ChaincodeID chaincodeID = ChaincodeID.newBuilder()
-				.setName(id)//TODO params.get("chaincode.id.name"))
-				.build();
-
-		ChaincodeMessage payload = ChaincodeMessage.newBuilder()
-				.setPayload(chaincodeID.toByteString())
-				.setType(Type.REGISTER)
-				.build();
-
-		// Register on the stream
-		logger.debug(String.format("Registering as '%s' ... sending %s", id, Type.REGISTER));
-		handler.serialSend(payload);
-
-		while (true) {
-			try {
-				NextStateInfo nsInfo = handler.nextState.take();
-				ChaincodeMessage message = nsInfo.message;
-				handler.handleMessage(message);
-				//keepalive messages are PONGs to the fabric's PINGs
-				if (nsInfo.sendToCC || message.getType() == Type.KEEPALIVE) {
-					if (message.getType() == Type.KEEPALIVE){
-						logger.debug("Sending KEEPALIVE response");
-					}else {
-						logger.debug("[" + Handler.shortID(message.getTxid()) + "]Send state message " + message.getType());
-					}
-					handler.serialSend(message);
-				}
-			} catch (Exception e) {
-				break;
-			}
+		@Override
+		public void onCompleted() {
+		    connection.shutdown();
+		    handler.nextState.close();
 		}
+	    });
+	} catch (Exception e) {
+	    logger.error("Unable to connect to peer server");
+	    System.exit(-1);
 	}
 
-	public ByteString runRaw(ChaincodeStub stub, String function, String[] args) {
-		return null;
-	}
+	// Create the org.hyperledger.java.shim handler responsible for all
+	// control logic
+	handler = new Handler(requestObserver, this);
 
-	protected ByteString runHelper(ChaincodeStub stub, String function, String[] args) {
-		ByteString ret = runRaw(stub, function, args);
-		if (ret == null) {
-			String tmp = run(stub, function, args);
-			ret = ByteString.copyFromUtf8(tmp == null ? "" : tmp);
+	// Send the ChaincodeID during register.
+	ChaincodeID chaincodeID = ChaincodeID.newBuilder().setName(id)// TODO
+								      // params.get("chaincode.id.name"))
+		.build();
+
+	ChaincodeMessage payload = ChaincodeMessage.newBuilder().setPayload(chaincodeID.toByteString())
+		.setType(Type.REGISTER).build();
+
+	// Register on the stream
+	logger.info(String.format("Registering as '%s' ... sending %s", id, Type.REGISTER));
+	handler.serialSend(payload);
+
+	while (true) {
+	    try {
+		NextStateInfo nsInfo = handler.nextState.take();
+		ChaincodeMessage message = nsInfo.message;
+		handler.handleMessage(message);
+		// keepalive messages are PONGs to the fabric's PINGs
+		if (nsInfo.sendToCC || message.getType() == Type.KEEPALIVE) {
+		    if (message.getType() == Type.KEEPALIVE) {
+			logger.info("Sending KEEPALIVE response");
+		    } else {
+			logger.info(
+				"[" + Handler.shortID(message.getTxid()) + "]Send state message " + message.getType());
+		    }
+		    handler.serialSend(message);
 		}
-		return ret;
+	    } catch (Exception e) {
+		break;
+	    }
 	}
+    }
+
+    static String toJsonString(ChaincodeMessage message) {
+        try {
+    	return JsonFormat.printer().print(message);
+        } catch(InvalidProtocolBufferException e) {
+    	return String.format("{ Type: %s, TxId: %s }", message.getType(), message.getTxid());
+        }
+    }
 }
diff --git a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeHelper.java b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeHelper.java
new file mode 100644
index 00000000000..162394dd1dd
--- /dev/null
+++ b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/ChaincodeHelper.java
@@ -0,0 +1,172 @@
+/*
+ *  Copyright 2017 IBM - All Rights Reserved.
+ *
+ *  Licensed under the Apache License, Version 2.0 (the "License");
+ *  you may not use this file except in compliance with the License.
+ *  You may obtain a copy of the License at
+ *    http://www.apache.org/licenses/LICENSE-2.0
+ *  Unless required by applicable law or agreed to in writing, software
+ *  distributed under the License is distributed on an "AS IS" BASIS,
+ *  WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ *  See the License for the specific language governing permissions and
+ *  limitations under the License.
+ */
+package org.hyperledger.java.shim;
+
+import static org.hyperledger.fabric.protos.common.Common.Status.BAD_REQUEST;
+import static org.hyperledger.fabric.protos.common.Common.Status.FORBIDDEN;
+import static org.hyperledger.fabric.protos.common.Common.Status.INTERNAL_SERVER_ERROR;
+import static org.hyperledger.fabric.protos.common.Common.Status.NOT_FOUND;
+import static org.hyperledger.fabric.protos.common.Common.Status.REQUEST_ENTITY_TOO_LARGE;
+import static org.hyperledger.fabric.protos.common.Common.Status.SERVICE_UNAVAILABLE;
+import static org.hyperledger.fabric.protos.common.Common.Status.SUCCESS;
+
+import java.io.PrintWriter;
+import java.io.StringWriter;
+import java.nio.charset.StandardCharsets;
+
+import org.hyperledger.fabric.protos.common.Common.Status;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response.Builder;
+
+import com.google.protobuf.ByteString;
+
+public abstract class ChaincodeHelper {
+    public static final int UNKNOWN_VALUE = 0;
+    
+    public static Response newResponse(Status status, String message, byte[] payload) {
+        final Builder builder = Response.newBuilder();
+        builder.setStatus(status.getNumber());
+        if(message != null) {
+        	builder.setMessage(message);
+        }
+        if(payload != null) {
+            builder.setPayload(ByteString.copyFrom(payload));
+        }
+        return builder.build();
+    }
+    
+    public static Response newSuccessResponse(String message, byte[] payload) {
+        return newResponse(SUCCESS, message, payload);
+    }
+    
+    public static Response newSuccessResponse() {
+    	return newSuccessResponse(null, null);
+    }
+    
+    public static Response newSuccessResponse(String message) {
+        return newSuccessResponse(message, null);
+    }
+
+    public static Response newSuccessResponse(byte[] payload) {
+        return newSuccessResponse(null, payload);
+    }
+
+    public static Response newBadRequestResponse(String message, byte[] payload) {
+        return newResponse(BAD_REQUEST, message, payload);
+    }
+    
+    public static Response newBadRequestResponse() {
+    	return newBadRequestResponse(null, null);
+    }
+    
+    public static Response newBadRequestResponse(String message) {
+        return newBadRequestResponse(message, null);
+    }
+
+    public static Response newBadRequestResponse(byte[] payload) {
+        return newBadRequestResponse(null, payload);
+    }
+
+    public static Response newForbiddenResponse(byte[] payload) {
+        return newForbiddenResponse(null, payload);
+    }
+
+    public static Response newForbiddenResponse(String message, byte[] payload) {
+        return newResponse(FORBIDDEN, message, payload);
+    }
+    
+    public static Response newForbiddenResponse() {
+    	return newForbiddenResponse(null, null);
+    }
+    
+    public static Response newForbiddenResponse(String message) {
+        return newForbiddenResponse(message, null);
+    }
+
+    public static Response newNotFoundResponse(String message, byte[] payload) {
+        return newResponse(NOT_FOUND, message, payload);
+    }
+    
+    public static Response newNotFoundResponse() {
+    	return newNotFoundResponse(null, null);
+    }
+    
+    public static Response newNotFoundResponse(String message) {
+        return newNotFoundResponse(message, null);
+    }
+
+    public static Response newNotFoundResponse(byte[] payload) {
+        return newNotFoundResponse(null, payload);
+    }
+     
+    public static Response newRequestEntityTooLargeResponse(String message, byte[] payload) {
+        return newResponse(REQUEST_ENTITY_TOO_LARGE, message, payload);
+    }
+    
+    public static Response newRequestEntityTooLargeResponse() {
+    	return newRequestEntityTooLargeResponse(null, null);
+    }
+    
+    public static Response newRequestEntityTooLargeResponse(String message) {
+        return newRequestEntityTooLargeResponse(message, null);
+    }
+
+    public static Response newRequestEntityTooLargeResponse(byte[] payload) {
+        return newRequestEntityTooLargeResponse(null, payload);
+    }
+    
+    public static Response newInternalServerErrorResponse(String message, byte[] payload) {
+        return newResponse(INTERNAL_SERVER_ERROR, message, payload);
+    }
+    
+    public static Response newInternalServerErrorResponse() {
+    	return newInternalServerErrorResponse(null, null);
+    }
+    
+    public static Response newInternalServerErrorResponse(String message) {
+        return newInternalServerErrorResponse(message, null);
+    }
+
+    public static Response newInternalServerErrorResponse(byte[] payload) {
+        return newInternalServerErrorResponse(null, payload);
+    }
+     
+    public static Response newInternalServerErrorResponse(Throwable throwable) {
+        return newInternalServerErrorResponse(throwable.getMessage(), printStackTrace(throwable));
+    }
+     
+    public static Response newServiceUnavailableErrorResponse(String message, byte[] payload) {
+        return newResponse(SERVICE_UNAVAILABLE, message, payload);
+    }
+    
+    public static Response newServiceUnavailableErrorResponse() {
+    	return newServiceUnavailableErrorResponse(null, null);
+    }
+    
+    public static Response newServiceUnavailableErrorResponse(String message) {
+        return newServiceUnavailableErrorResponse(message, null);
+    }
+
+    public static Response newServiceUnavailableErrorResponse(byte[] payload) {
+        return newServiceUnavailableErrorResponse(null, payload);
+    }
+
+    static byte[] printStackTrace(Throwable throwable) {
+        if(throwable == null) return null;
+        final StringWriter buffer = new StringWriter();
+        throwable.printStackTrace(new PrintWriter(buffer));
+        return buffer.toString().getBytes(StandardCharsets.UTF_8);
+    }
+    
+}
diff --git a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/Handler.java b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/Handler.java
index d20dd1d4eb5..5329f70eb28 100644
--- a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/Handler.java
+++ b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/Handler.java
@@ -1,5 +1,5 @@
 /*
-Copyright DTCC 2016 All Rights Reserved.
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
 
 Licensed under the Apache License, Version 2.0 (the "License");
 you may not use this file except in compliance with the License.
@@ -16,10 +16,36 @@
 
 package org.hyperledger.java.shim;
 
-import com.google.protobuf.ByteString;
-import io.grpc.stub.StreamObserver;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.COMPLETED;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.DEL_STATE;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.ERROR;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.GET_STATE;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.INIT;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.INVOKE_CHAINCODE;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.PUT_STATE;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.READY;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.REGISTERED;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.RESPONSE;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.TRANSACTION;
+import static org.hyperledger.java.fsm.CallbackType.AFTER_EVENT;
+import static org.hyperledger.java.fsm.CallbackType.BEFORE_EVENT;
+import static org.hyperledger.java.shim.HandlerHelper.newCompletedEventMessage;
+import static org.hyperledger.java.shim.HandlerHelper.newErrorEventMessage;
+
+import java.util.ArrayList;
+import java.util.HashMap;
+import java.util.List;
+import java.util.Map;
+
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
+import org.hyperledger.fabric.protos.common.Common.Status;
+import org.hyperledger.fabric.protos.peer.Chaincode.ChaincodeID;
+import org.hyperledger.fabric.protos.peer.Chaincode.ChaincodeInput;
+import org.hyperledger.fabric.protos.peer.Chaincode.ChaincodeSpec;
+import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage;
+import org.hyperledger.fabric.protos.peer.ChaincodeShim.PutStateInfo;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
 import org.hyperledger.java.fsm.CBDesc;
 import org.hyperledger.java.fsm.Event;
 import org.hyperledger.java.fsm.EventDesc;
@@ -27,17 +53,11 @@
 import org.hyperledger.java.fsm.exceptions.CancelledException;
 import org.hyperledger.java.fsm.exceptions.NoTransitionException;
 import org.hyperledger.java.helper.Channel;
-import org.hyperledger.fabric.protos.peer.Chaincode.*;
-import org.hyperledger.fabric.protos.peer.ChaincodeShim.*;
-import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Builder;
 
-import java.util.ArrayList;
-import java.util.HashMap;
-import java.util.List;
-import java.util.Map;
+import com.google.protobuf.ByteString;
+import com.google.protobuf.InvalidProtocolBufferException;
 
-import static org.hyperledger.java.fsm.CallbackType.*;
-import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.*;
+import io.grpc.stub.StreamObserver;
 
 public class Handler {
 
@@ -100,6 +120,7 @@ public void triggerNextState(ChaincodeMessage message, boolean send) {
 	}
 
 	public synchronized void serialSend(ChaincodeMessage message) {
+	    logger.debug("Sending message to peer: " + ChaincodeBase.toJsonString(message));
 		try {
 			chatStream.onNext(message);
 		} catch (Exception e) {
@@ -182,66 +203,53 @@ public void beforeRegistered(Event event) {
 	 * @param message chaincode to be initialized
 	 */
 	public void handleInit(ChaincodeMessage message) {
-		Runnable task = () -> {
-			ChaincodeMessage nextStatemessage = null;
-			boolean send = true;
+		new Thread(() -> {
 			try {
+				
 				// Get the function and args from Payload
-				ChaincodeInput input;
-				try {
-					input = ChaincodeInput.parseFrom(message.getPayload());
-				} catch (Exception e) {
-					// payload = []byte(unmarshalErr.Error())
-					// Send ERROR message to chaincode support and change state
-					// logger.debug(String.format("[%s]Incorrect payload format. Sending %s", shortID(message), ERROR)
-					// nextStatemessage = ChaincodeMessage.newBuilder(){Type: ERROR, Payload: payload, Uuid: message.getTxid()}
-					return;
-				}
-
-				//			// Mark as a transaction (allow put/del state)
+				final ChaincodeInput input = ChaincodeInput.parseFrom(message.getPayload());
+				
+				// Mark as a transaction (allow put/del state)
 				markIsTransaction(message.getTxid(), true);
-
+				
 				// Create the ChaincodeStub which the chaincode can use to callback
-				ChaincodeStub stub = new ChaincodeStub(message.getTxid(), this);
-
+				final ChaincodeStub stub = new ChaincodeStub(message.getTxid(), this);
+				
 				// Call chaincode's Run
-				ByteString result;
-				try {
-					result = chaincode.runHelper(stub, getFunction(input.getArgsList()), getParameters(input.getArgsList()));
-				} catch (Exception e) {
-					// Send ERROR message to chaincode support and change state
-					logger.debug(String.format("[%s]Init failed. Sending %s", shortID(message), ERROR));
-					nextStatemessage = ChaincodeMessage.newBuilder()
+				final Response result = chaincode.run(stub, getFunction(input.getArgsList()), getParameters(input.getArgsList()));
+				logger.debug(String.format(String.format("[%s]Init succeeded. Sending %s", shortID(message), COMPLETED)));
+				
+				if(result.getStatus() == Status.SUCCESS_VALUE) {
+					// Send COMPLETED with entire result as payload
+					triggerNextState(ChaincodeMessage.newBuilder()
+							.setType(COMPLETED)
+							.setPayload(result.toByteString())
+							.setTxid(message.getTxid())
+							.build(), true);
+				} else {
+					// Send ERROR with entire result.Message as payload
+					triggerNextState(ChaincodeMessage.newBuilder()
 							.setType(ERROR)
-							.setPayload(ByteString.copyFromUtf8(e.getMessage()))
+							.setPayload(result.getMessageBytes())
 							.setTxid(message.getTxid())
-							.build();
-					return;
-				} finally {
-					// delete isTransaction entry
-					deleteIsTransaction(message.getTxid());
+							.build(), true);
 				}
-
-				// Send COMPLETED message to chaincode support and change state
-				nextStatemessage = ChaincodeMessage.newBuilder()
-						.setType(COMPLETED)
-						.setPayload(result)
+			
+			} catch (InvalidProtocolBufferException | RuntimeException e) {
+				logger.error(String.format("[%s]Init failed. Sending %s", shortID(message), ERROR), e);
+				triggerNextState(ChaincodeMessage.newBuilder()
+						.setType(ERROR)
+						.setPayload(Response.newBuilder()
+							.setStatus(Status.INTERNAL_SERVER_ERROR_VALUE)
+							.setPayload(ByteString.copyFromUtf8(e.toString()))
+							.build().toByteString())
 						.setTxid(message.getTxid())
-						.build();
-
-				logger.debug(String.format(String.format("[%s]Init succeeded. Sending %s",
-						shortID(message), COMPLETED)));
-
-				//TODO put in all exception states
-			} catch (Exception e) {
-				throw e;
+						.build(), true);
 			} finally {
-				triggerNextState(nextStatemessage, send);
+				// delete isTransaction entry
+				deleteIsTransaction(message.getTxid());
 			}
-		};
-
-		//Run above task
-		new Thread(task).start();
+		}).start();
 	}
 
 	private String getFunction(List<ByteString> args) {
@@ -253,13 +261,13 @@ private String[] getParameters(List<ByteString> args) {
 	    	// skip arg[0], that is the function name
 	    	for(int i = 1; i < args.size(); i++) {
 	    	    results.add(args.get(i).toStringUtf8());
-	    	}		
+	    	}
 		return results.toArray(new String[results.size()]);
 	}
 
 	// enterInitState will initialize the chaincode if entering init from established.
 	public void beforeInit(Event event) {
-	    	logger.debug(String.format("Before %s event.", event.name));
+    	logger.debug(String.format("Before %s event.", event.name));
 		logger.debug(String.format("Current state %s", fsm.current()));
 		final ChaincodeMessage message = extractMessageFromEvent(event);
 		logger.debug(String.format("[%s]Received %s, initializing chaincode", shortID(message), message.getType()));
@@ -269,7 +277,6 @@ public void beforeInit(Event event) {
 		}
 	}
 
-	//
 	// handleTransaction Handles request to execute a transaction.
 	public void handleTransaction(ChaincodeMessage message) {
 		// The defer followed by triggering a go routine dance is needed to ensure that the previous state transition
@@ -286,14 +293,11 @@ public void handleTransaction(ChaincodeMessage message) {
 				ChaincodeInput input;
 				try {
 					input = ChaincodeInput.parseFrom(message.getPayload());
-				} catch (Exception e) {
+				} catch (InvalidProtocolBufferException e) {
+				    logger.error(String.format("[%s]Incorrect payload format", shortID(message)), e);
 					logger.debug(String.format("[%s]Incorrect payload format. Sending %s", shortID(message), ERROR));
 					// Send ERROR message to chaincode support and change state
-					nextStatemessage = ChaincodeMessage.newBuilder()
-							.setType(ERROR)
-							.setPayload(message.getPayload())
-							.setTxid(message.getTxid())
-							.build();
+					nextStatemessage = newErrorEventMessage(message.getTxid(), e);
 					return;
 				}
 
@@ -301,37 +305,26 @@ public void handleTransaction(ChaincodeMessage message) {
 				markIsTransaction(message.getTxid(), true);
 
 				// Create the ChaincodeStub which the chaincode can use to callback
-				ChaincodeStub stub = new ChaincodeStub(message.getTxid(), this);
+				final ChaincodeStub stub = new ChaincodeStub(message.getTxid(), this);
 
 				// Call chaincode's Run
-				ByteString response;
+				Response response;
 				try {
-					response = chaincode.runHelper(stub, getFunction(input.getArgsList()), getParameters(input.getArgsList()));
-				} catch (Exception e) {
-					e.printStackTrace();
-					System.err.flush();
+					response = chaincode.run(stub, getFunction(input.getArgsList()), getParameters(input.getArgsList()));
+				} catch (Throwable throwable) {
 					// Send ERROR message to chaincode support and change state
-					logger.error(String.format("[%s]Error running chaincode. Transaction execution failed. Sending %s",
-							shortID(message), ERROR));
-					nextStatemessage = ChaincodeMessage.newBuilder()
-							.setType(ERROR)
-							.setPayload(message.getPayload())
-							.setTxid(message.getTxid())
-							.build();
+					logger.error(String.format("[%s]Error running chaincode. Transaction execution failed. Sending %s", shortID(message), ERROR));
+					nextStatemessage = newErrorEventMessage(message.getTxid(), throwable);
 					return;
 				} finally {
 					deleteIsTransaction(message.getTxid());
 				}
 
-				logger.debug(String.format("[%s]Transaction completed. Sending %s",
-						shortID(message), COMPLETED));
+				logger.info(String.format("[%s]Transaction completed. Sending %s", shortID(message), COMPLETED));
+				logger.info(String.format("[%s] Response ='%s'", shortID(message), response));
 
 				// Send COMPLETED message to chaincode support and change state
-				Builder builder = ChaincodeMessage.newBuilder()
-						.setType(COMPLETED)
-						.setTxid(message.getTxid());
-				if (response != null) builder.setPayload(response);
-				nextStatemessage = builder.build();
+				nextStatemessage = newCompletedEventMessage(message.getTxid(), response);
 			} finally {
 				triggerNextState(nextStatemessage, send);
 			}
@@ -340,8 +333,7 @@ public void handleTransaction(ChaincodeMessage message) {
 		new Thread(task).start();
 	}
 
-
-	// enterTransactionState will execute chaincode's Run if coming from a TRANSACTION event.
+    // enterTransactionState will execute chaincode's Run if coming from a TRANSACTION event.
 	public void beforeTransaction(Event event) {
 		ChaincodeMessage message = extractMessageFromEvent(event);
 		logger.debug(String.format("[%s]Received %s, invoking transaction on chaincode(src:%s, dst:%s)",
@@ -762,19 +754,12 @@ public synchronized void handleMessage(ChaincodeMessage message) throws Exceptio
 				return;
 		}
 
-		logger.debug(String.format("[%s]Handling ChaincodeMessage of type: %s(state:%s)",
-				shortID(message), message.getType(), fsm.current()));
+		logger.debug(String.format("[%s]Handling ChaincodeMessage of type: %s(state:%s)", shortID(message), message.getType(), fsm.current()));
 
 		if (fsm.eventCannotOccur(message.getType().toString())) {
 			String errStr = String.format("[%s]Chaincode handler org.hyperledger.java.fsm cannot handle message (%s) with payload size (%d) while in state: %s",
 					message.getTxid(), message.getType(), message.getPayload().size(), fsm.current());
-			ByteString payload = ByteString.copyFromUtf8(errStr);
-			ChaincodeMessage errormessage = ChaincodeMessage.newBuilder()
-					.setType(ERROR)
-					.setPayload(payload)
-					.setTxid(message.getTxid())
-					.build();
-			serialSend(errormessage);
+			serialSend(newErrorEventMessage(message.getTxid(), errStr));
 			throw new RuntimeException(errStr);
 		}
 
diff --git a/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/HandlerHelper.java b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/HandlerHelper.java
new file mode 100644
index 00000000000..6c51be0f626
--- /dev/null
+++ b/core/chaincode/shim/java/src/main/java/org/hyperledger/java/shim/HandlerHelper.java
@@ -0,0 +1,61 @@
+/*
+ *  Copyright 2017 IBM - All Rights Reserved.
+ *
+ *  Licensed under the Apache License, Version 2.0 (the "License");
+ *  you may not use this file except in compliance with the License.
+ *  You may obtain a copy of the License at
+ *    http://www.apache.org/licenses/LICENSE-2.0
+ *  Unless required by applicable law or agreed to in writing, software
+ *  distributed under the License is distributed on an "AS IS" BASIS,
+ *  WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ *  See the License for the specific language governing permissions and
+ *  limitations under the License.
+ */
+package org.hyperledger.java.shim;
+
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.COMPLETED;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.ERROR;
+import static org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type.GET_STATE;
+
+import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage;
+import org.hyperledger.fabric.protos.peer.ChaincodeShim.ChaincodeMessage.Type;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
+
+import com.google.protobuf.ByteString;
+
+abstract class HandlerHelper {
+
+    private static ChaincodeMessage newEventMessage(final Type type, final String txid, final ByteString payload) {
+        return ChaincodeMessage.newBuilder()
+                .setType(type)
+                .setTxid(txid)
+                .setPayload(payload)
+                .build();
+    }
+    
+    static ChaincodeMessage newGetStateEventMessage(final String txid, final String key) {
+        return newEventMessage(GET_STATE, txid, ByteString.copyFromUtf8(key));
+    }
+    
+    static ChaincodeMessage newErrorEventMessage(final String txid, final Response payload) {
+        return newEventMessage(ERROR, txid, payload.toByteString());
+    }
+    
+    static ChaincodeMessage newErrorEventMessage(final String txid, final Throwable throwable) {
+        return newErrorEventMessage(txid, ChaincodeHelper.newInternalServerErrorResponse(throwable));
+    }
+
+    static ChaincodeMessage newErrorEventMessage(final String txid, final String message) {
+        return newErrorEventMessage(txid, ChaincodeHelper.newInternalServerErrorResponse(message));
+    }
+
+    static ChaincodeMessage newCompletedEventMessage(final String txid, Response response) {
+        return ChaincodeMessage.newBuilder()
+                .setType(COMPLETED)
+                .setTxid(txid)
+                .setPayload(response.toByteString())
+                .build();
+    }
+
+
+}
diff --git a/examples/chaincode/java/SimpleSample/build.gradle b/examples/chaincode/java/SimpleSample/build.gradle
index c98e18e29ce..9efe29aa4b2 100644
--- a/examples/chaincode/java/SimpleSample/build.gradle
+++ b/examples/chaincode/java/SimpleSample/build.gradle
@@ -80,4 +80,5 @@ dependencies {
     compile 'io.grpc:grpc-all:0.13.2'
     compile 'commons-cli:commons-cli:1.3.1'
     compile 'org.hyperledger:shim-client:1.0'
-        }
+    compile 'org.glassfish:javax.json:1.1.0-M1'
+}
diff --git a/examples/chaincode/java/SimpleSample/src/main/java/example/SimpleSample.java b/examples/chaincode/java/SimpleSample/src/main/java/example/SimpleSample.java
index f00fdd010ae..2f450aca47a 100644
--- a/examples/chaincode/java/SimpleSample/src/main/java/example/SimpleSample.java
+++ b/examples/chaincode/java/SimpleSample/src/main/java/example/SimpleSample.java
@@ -1,164 +1,153 @@
-/*
-Copyright DTCC 2016 All Rights Reserved.
-
-Licensed under the Apache License, Version 2.0 (the "License");
-you may not use this file except in compliance with the License.
-You may obtain a copy of the License at
-
-         http://www.apache.org/licenses/LICENSE-2.0
-
-Unless required by applicable law or agreed to in writing, software
-distributed under the License is distributed on an "AS IS" BASIS,
-WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
-See the License for the specific language governing permissions and
-limitations under the License.
-*/
-
-package example;
-
-import java.util.Arrays;
-
-import org.hyperledger.java.shim.ChaincodeBase;
-import org.hyperledger.java.shim.ChaincodeStub;
-import org.apache.commons.logging.Log;
-import org.apache.commons.logging.LogFactory;
-
-/**
- * <h1>Classic "transfer" sample chaincode</h1>
- * (java implementation of <A href="https://github.com/hyperledger/fabric/blob/master/examples/chaincode/go/chaincode_example02/chaincode_example02.go">chaincode_example02.go</A>)
- * @author Sergey Pomytkin spomytkin@gmail.com
- *
- */
-public class SimpleSample extends ChaincodeBase {
-	 private static Log log = LogFactory.getLog(SimpleSample.class);
-
-	@Override
-	public String run(ChaincodeStub stub, String function, String[] args) {
-		log.info("In run, function: " + function + ", args: " + Arrays.toString(args));
-
-		switch (function) {
-		case "init":
-			init(stub, function, args);
-			break;
-		case "transfer":
-			String re = transfer(stub, args);
-			System.out.println(re);
-			return re;
-		case "put":
-			for (int i = 0; i < args.length; i += 2)
-				stub.putState(args[i], args[i + 1]);
-			break;
-		case "del":
-			for (String arg : args)
-				stub.delState(arg);
-			break;
-		case "query":
-			return query(stub, function, args);
-		default:
-			return transfer(stub, args);
-		}
-
-		return null;
-	}
-
-	private String  transfer(ChaincodeStub stub, String[] args) {
-		System.out.println("in transfer");
-		if(args.length!=3){
-			System.out.println("Incorrect number of arguments:"+args.length);
-			return "{\"Error\":\"Incorrect number of arguments. Expecting 3: from, to, amount\"}";
-		}
-		String fromName =args[0];
-		String fromAm=stub.getState(fromName);
-		String toName =args[1];
-		String toAm=stub.getState(toName);
-		String am =args[2];
-		int valFrom=0;
-		if (fromAm!=null&&!fromAm.isEmpty()){
-			try{
-				valFrom = Integer.parseInt(fromAm);
-			}catch(NumberFormatException e ){
-				System.out.println("{\"Error\":\"Expecting integer value for asset holding of "+fromName+" \"}"+e);
-				return "{\"Error\":\"Expecting integer value for asset holding of "+fromName+" \"}";
-			}
-		}else{
-			return "{\"Error\":\"Failed to get state for " +fromName + "\"}";
-		}
-
-		int valTo=0;
-		if (toAm!=null&&!toAm.isEmpty()){
-			try{
-				valTo = Integer.parseInt(toAm);
-			}catch(NumberFormatException e ){
-				e.printStackTrace();
-				return "{\"Error\":\"Expecting integer value for asset holding of "+toName+" \"}";
-			}
-		}else{
-			return "{\"Error\":\"Failed to get state for " +toName + "\"}";
-		}
-
-		int valA =0;
-		try{
-			valA = Integer.parseInt(am);
-		}catch(NumberFormatException e ){
-			e.printStackTrace();
-			return "{\"Error\":\"Expecting integer value for amount \"}";
-		}
-		if(valA>valFrom)
-			return "{\"Error\":\"Insufficient asset holding value for requested transfer amount \"}";
-		valFrom = valFrom-valA;
-		valTo = valTo+valA;
-		System.out.println("Transfer "+fromName+">"+toName+" am='"+am+"' new values='"+valFrom+"','"+ valTo+"'");
-		stub.putState(fromName,""+ valFrom);
-		stub.putState(toName, ""+valTo);
-
-		System.out.println("Transfer complete");
-
-		return null;
-
-	}
-
-	public String init(ChaincodeStub stub, String function, String[] args) {
-		if(args.length!=4){
-			return "{\"Error\":\"Incorrect number of arguments. Expecting 4\"}";
-		}
-		try{
-			int valA = Integer.parseInt(args[1]);
-			int valB = Integer.parseInt(args[3]);
-			stub.putState(args[0], args[1]);
-			stub.putState(args[2], args[3]);
-		}catch(NumberFormatException e ){
-			return "{\"Error\":\"Expecting integer value for asset holding\"}";
-		}
-		return null;
-	}
-
-
-	public String query(ChaincodeStub stub, String function, String[] args) {
-		if(args.length!=1){
-			return "{\"Error\":\"Incorrect number of arguments. Expecting name of the person to query\"}";
-		}
-		String am =stub.getState(args[0]);
-		if (am!=null&&!am.isEmpty()){
-			try{
-				int valA = Integer.parseInt(am);
-				return  "{\"Name\":\"" + args[0] + "\",\"Amount\":\"" + am + "\"}";
-			}catch(NumberFormatException e ){
-				return "{\"Error\":\"Expecting integer value for asset holding\"}";
-			}		}else{
-			return "{\"Error\":\"Failed to get state for " + args[0] + "\"}";
-		}
-
-
-	}
-
-	@Override
-	public String getChaincodeID() {
-		return "SimpleSample";
-	}
-
-	public static void main(String[] args) throws Exception {
-		new SimpleSample().start(args);
-	}
-
-
-}
+/*
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+         http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package example;
+
+import static java.lang.String.format;
+import static java.nio.charset.StandardCharsets.UTF_8;
+import static org.hyperledger.java.shim.ChaincodeHelper.newBadRequestResponse;
+import static org.hyperledger.java.shim.ChaincodeHelper.newInternalServerErrorResponse;
+import static org.hyperledger.java.shim.ChaincodeHelper.newSuccessResponse;
+
+import java.io.PrintWriter;
+import java.io.StringWriter;
+import java.nio.charset.StandardCharsets;
+
+import javax.json.Json;
+import javax.json.JsonObjectBuilder;
+
+import org.apache.commons.logging.Log;
+import org.apache.commons.logging.LogFactory;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
+import org.hyperledger.java.shim.ChaincodeBase;
+import org.hyperledger.java.shim.ChaincodeStub;
+
+/**
+ * <h1>Classic "transfer" sample chaincode</h1> (java implementation of <A href=
+ * "https://github.com/hyperledger/fabric/blob/master/examples/chaincode/go/chaincode_example02/chaincode_example02.go">chaincode_example02.go</A>)
+ * 
+ * @author Sergey Pomytkin spomytkin@gmail.com
+ *
+ */
+public class SimpleSample extends ChaincodeBase {
+    private static Log log = LogFactory.getLog(SimpleSample.class);
+
+    @Override
+    public Response run(ChaincodeStub stub, String function, String[] args) {
+
+	try {
+	    
+	    switch (function) {
+	    case "init":
+		return init(stub, function, args);
+	    case "transfer":
+		return transfer(stub, args);
+	    case "put":
+		for (int i = 0; i < args.length; i += 2)
+		    stub.putState(args[i], args[i + 1]);
+		return newSuccessResponse();
+	    case "del":
+		for (String arg : args)
+		    stub.delState(arg);
+		return newSuccessResponse();
+	    case "query":
+		return query(stub, function, args);
+	    default:
+		return newBadRequestResponse(format("Unknown function: %s", function));
+	    }
+	    
+	} catch (NumberFormatException e) {
+	    return newBadRequestResponse(e.toString());
+	} catch (IllegalArgumentException e) {
+	    return newBadRequestResponse(e.getMessage());
+	} catch (Throwable e) {
+	    return newInternalServerErrorResponse(e);
+	}
+	
+    }
+
+    private Response transfer(ChaincodeStub stub, String[] args) {
+	if (args.length != 3) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: transfer(from, to, amount)");
+	final String fromKey = args[0];
+	final String toKey = args[1];
+	final String amount = args[2];
+	
+	// get state of the from/to keys
+	final String fromKeyState = stub.getState(fromKey);
+	final String toKeyState = stub.getState(toKey);
+	
+	// parse states as integers
+	int fromAccountBalance = Integer.parseInt(fromKeyState);
+	int toAccountBalance = Integer.parseInt(toKeyState);
+	
+	// parse the transfer amount as an integer
+	int transferAmount = Integer.parseInt(amount);
+
+	// make sure the transfer is possible
+	if (transferAmount > fromAccountBalance) {
+	    throw new IllegalArgumentException("Insufficient asset holding value for requested transfer amount.");
+	}
+	
+	// perform the transfer
+	log.info(String.format("Tranferring %d holdings from %s to %s", transferAmount, fromKey, toKey));
+	int newFromAccountBalance = fromAccountBalance - transferAmount;
+	int newToAccountBalance = toAccountBalance + transferAmount;
+	log.info(String.format("New holding values will be: %s = %d, %s = %d", fromKey, newFromAccountBalance, toKey, newToAccountBalance));
+	stub.putState(fromKey, Integer.toString(newFromAccountBalance));
+	stub.putState(toKey, Integer.toString(newToAccountBalance));
+	log.info("Transfer complete.");
+
+	return newSuccessResponse(format("Successfully transferred %d assets from %s to %s.", transferAmount, fromKey, toKey));
+    }
+
+    public Response init(ChaincodeStub stub, String function, String[] args) {
+	if (args.length != 4) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: init(account1, amount1, account2, amount2)");
+
+	final String accountKey1 = args[0];
+	final String accountKey2 = args[2];
+	final String account1Balance = args[1];
+	final String account2Balance = args[3];
+	
+	stub.putState(accountKey1, new Integer(account1Balance).toString());
+	stub.putState(accountKey2, new Integer(account2Balance).toString());
+	
+	return newSuccessResponse();
+    }
+
+    public Response query(ChaincodeStub stub, String function, String[] args) {
+	if (args.length != 1) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: query(account)");
+	
+	final String accountKey = args[0];
+	
+	return newSuccessResponse(Json.createObjectBuilder()
+		.add("Name", accountKey)
+		.add("Amount", Integer.parseInt(stub.getState(accountKey)))
+		.build().toString().getBytes(UTF_8)
+	);
+	
+    }
+    
+    
+    @Override
+    public String getChaincodeID() {
+	return "SimpleSample";
+    }
+
+    public static void main(String[] args) throws Exception {
+	new SimpleSample().start(args);
+    }
+
+}
diff --git a/examples/chaincode/java/chaincode_example02/build.gradle b/examples/chaincode/java/chaincode_example02/build.gradle
new file mode 100644
index 00000000000..8363f81c3cf
--- /dev/null
+++ b/examples/chaincode/java/chaincode_example02/build.gradle
@@ -0,0 +1,84 @@
+/*
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+         http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+
+buildscript {
+    repositories {
+        mavenLocal()
+        mavenCentral()
+        jcenter()
+    }
+}
+
+plugins {
+    id "java"
+    id "eclipse"
+    id "application"
+}
+
+
+task printClasspath {
+    doLast {
+        configurations.testRuntime.each { println it }
+    }
+}
+
+archivesBaseName = "chaincode"
+mainClassName="example.Example02"
+
+run {
+    if (project.hasProperty("appArgs")) {
+        args = Eval.me(appArgs)
+    }
+}
+
+sourceSets {
+    main {
+        java {
+            srcDir 'src/main/java'
+        }
+    }
+}
+
+repositories {
+    mavenLocal()
+    mavenCentral()
+}
+
+
+jar.doFirst {
+    destinationDir=file("${buildDir}")
+    manifest {
+        attributes (
+        'Main-Class': mainClassName,
+        'Class-Path': configurations.runtime.collect { "libs/"+"$it.name" }.join(' ')
+        )
+    }
+}
+
+task copyToLib(type: Copy) {
+    into "$buildDir/libs"
+    from configurations.runtime
+}
+build.finalizedBy(copyToLib)
+
+
+dependencies {
+    compile 'io.grpc:grpc-all:0.13.2'
+    compile 'commons-cli:commons-cli:1.3.1'
+    compile 'org.hyperledger:shim-client:1.0'
+    compile 'org.glassfish:javax.json:1.1.0-M1'
+}
diff --git a/examples/chaincode/java/chaincode_example02/src/main/java/example/Example02.java b/examples/chaincode/java/chaincode_example02/src/main/java/example/Example02.java
new file mode 100644
index 00000000000..405e037e8c2
--- /dev/null
+++ b/examples/chaincode/java/chaincode_example02/src/main/java/example/Example02.java
@@ -0,0 +1,144 @@
+/*
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+         http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package example;
+
+import static java.lang.String.format;
+import static java.nio.charset.StandardCharsets.UTF_8;
+import static org.hyperledger.java.shim.ChaincodeHelper.newBadRequestResponse;
+import static org.hyperledger.java.shim.ChaincodeHelper.newInternalServerErrorResponse;
+import static org.hyperledger.java.shim.ChaincodeHelper.newSuccessResponse;
+
+import javax.json.Json;
+
+import org.apache.commons.logging.Log;
+import org.apache.commons.logging.LogFactory;
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
+import org.hyperledger.java.shim.ChaincodeBase;
+import org.hyperledger.java.shim.ChaincodeStub;
+
+public class Example02 extends ChaincodeBase {
+	
+	private static Log log = LogFactory.getLog(Example02.class);
+
+	@Override
+	public Response run(ChaincodeStub stub, String function, String[] args) {
+		try {
+			switch (function) {
+			case "init":
+				return init(stub, args);
+			case "invoke":
+				return invoke(stub, args);
+			case "delete":
+				return delete(stub, args);
+			case "query":
+				return query(stub, args);
+			default:
+				return newBadRequestResponse(format("Unknown function: %s", function));
+			}
+		} catch (NumberFormatException e) {
+			return newBadRequestResponse(e.toString());
+		} catch (IllegalArgumentException e) {
+			return newBadRequestResponse(e.getMessage());
+		} catch (Throwable e) {
+			return newInternalServerErrorResponse(e);
+		}
+
+	}
+
+	public Response init(ChaincodeStub stub, String[] args) {
+		if (args.length != 4) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: init(account1, amount1, account2, amount2)");
+
+		final String accountKey1 = args[0];
+		final String accountKey2 = args[2];
+		final String account1Balance = args[1];
+		final String account2Balance = args[3];
+
+		stub.putState(accountKey1, new Integer(account1Balance).toString());
+		stub.putState(accountKey2, new Integer(account2Balance).toString());
+
+		return newSuccessResponse();
+	}
+	
+	private Response invoke(ChaincodeStub stub, String[] args) {
+		if (args.length != 3) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: transfer(from, to, amount)");
+		
+		final String fromKey = args[0];
+		final String toKey = args[1];
+		final String amount = args[2];
+
+		// get state of the from/to keys
+		final String fromKeyState = stub.getState(fromKey);
+		final String toKeyState = stub.getState(toKey);
+
+		// parse states as integers
+		int fromAccountBalance = Integer.parseInt(fromKeyState);
+		int toAccountBalance = Integer.parseInt(toKeyState);
+
+		// parse the transfer amount as an integer
+		int transferAmount = Integer.parseInt(amount);
+
+		// make sure the transfer is possible
+		if (transferAmount > fromAccountBalance) {
+			throw new IllegalArgumentException("Insufficient asset holding value for requested transfer amount.");
+		}
+
+		// perform the transfer
+		log.info(format("Tranferring %d holdings from %s to %s", transferAmount, fromKey, toKey));
+		int newFromAccountBalance = fromAccountBalance - transferAmount;
+		int newToAccountBalance = toAccountBalance + transferAmount;
+		log.info(format("New holding values will be: %s = %d, %s = %d", fromKey, newFromAccountBalance, toKey,
+				newToAccountBalance));
+		stub.putState(fromKey, Integer.toString(newFromAccountBalance));
+		stub.putState(toKey, Integer.toString(newToAccountBalance));
+		log.info("Transfer complete.");
+
+		return newSuccessResponse(format("Successfully transferred %d assets from %s to %s.", transferAmount, fromKey, toKey));
+	}
+
+	public Response delete(ChaincodeStub stub, String args[]) {
+		if (args.length != 1)
+			throw new IllegalArgumentException("Incorrect number of arguments. Expecting: delete(account)");
+		
+		final String account = args[0];
+		
+		stub.delState(account);
+		
+		return newSuccessResponse();
+	}
+	
+	public Response query(ChaincodeStub stub, String[] args) {
+		if (args.length != 1) throw new IllegalArgumentException("Incorrect number of arguments. Expecting: query(account)");
+
+		final String accountKey = args[0];
+
+		return newSuccessResponse(Json.createObjectBuilder()
+				.add("Name", accountKey)
+				.add("Amount", Integer.parseInt(stub.getState(accountKey)))
+				.build().toString().getBytes(UTF_8));
+
+	}
+
+	@Override
+	public String getChaincodeID() {
+		return "Example02";
+	}
+
+	public static void main(String[] args) throws Exception {
+		new Example02().start(args);
+	}
+
+}
diff --git a/examples/chaincode/java/chaincode_example06/build.gradle b/examples/chaincode/java/chaincode_example06/build.gradle
new file mode 100644
index 00000000000..6cd0d539a3f
--- /dev/null
+++ b/examples/chaincode/java/chaincode_example06/build.gradle
@@ -0,0 +1,83 @@
+/*
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+         http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+
+buildscript {
+    repositories {
+        mavenLocal()
+        mavenCentral()
+        jcenter()
+    }
+}
+
+plugins {
+    id "java"
+    id "eclipse"
+    id "application"
+}
+
+
+task printClasspath {
+    doLast {
+        configurations.testRuntime.each { println it }
+    }
+}
+
+archivesBaseName = "chaincode"
+mainClassName="example.Example06"
+
+run {
+    if (project.hasProperty("appArgs")) {
+        args = Eval.me(appArgs)
+    }
+}
+
+sourceSets {
+    main {
+        java {
+            srcDir 'src/main/java'
+        }
+    }
+}
+
+repositories {
+    mavenLocal()
+    mavenCentral()
+}
+
+
+jar.doFirst {
+    destinationDir=file("${buildDir}")
+    manifest {
+        attributes (
+        'Main-Class': mainClassName,
+        'Class-Path': configurations.runtime.collect { "libs/"+"$it.name" }.join(' ')
+        )
+    }
+}
+
+task copyToLib(type: Copy) {
+    into "$buildDir/libs"
+    from configurations.runtime
+}
+build.finalizedBy(copyToLib)
+
+
+dependencies {
+    compile 'io.grpc:grpc-all:0.13.2'
+    compile 'commons-cli:commons-cli:1.3.1'
+    compile 'org.hyperledger:shim-client:1.0'
+}
diff --git a/examples/chaincode/java/chaincode_example06/src/main/java/example/Example06.java b/examples/chaincode/java/chaincode_example06/src/main/java/example/Example06.java
new file mode 100644
index 00000000000..74b8012f9ad
--- /dev/null
+++ b/examples/chaincode/java/chaincode_example06/src/main/java/example/Example06.java
@@ -0,0 +1,47 @@
+/*
+Copyright DTCC, IBM 2016, 2017 All Rights Reserved.
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+         http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package example;
+
+import static java.lang.String.format;
+import static org.hyperledger.java.shim.ChaincodeHelper.newBadRequestResponse;
+
+import org.hyperledger.fabric.protos.peer.ProposalResponsePackage.Response;
+import org.hyperledger.java.shim.ChaincodeBase;
+import org.hyperledger.java.shim.ChaincodeStub;
+
+public class Example06 extends ChaincodeBase {
+	
+	@Override
+	public Response run(ChaincodeStub stub, String function, String[] args) {
+		switch (function) {
+		case "runtimeException":
+			throw new RuntimeException("Exception thrown as requested.");
+		default:
+			return newBadRequestResponse(format("Unknown function: %s", function));
+		}
+	}
+	
+	@Override
+	public String getChaincodeID() {
+		return "Example03";
+	}
+
+	public static void main(String[] args) throws Exception {
+		new Example06().start(args);
+	}
+
+}
diff --git a/peer/chaincode/features/environment.py b/peer/chaincode/features/environment.py
deleted file mode 100644
index 9f5d0f76143..00000000000
--- a/peer/chaincode/features/environment.py
+++ /dev/null
@@ -1,34 +0,0 @@
-from behave import *
-import os
-import re
-import subprocess
-
-# set the default step matcher
-use_step_matcher("re")
-
-def before_all(context):
-    # set some handy values
-    context.go_path = os.environ['GOPATH']
-    context.fabric_dir = os.path.join(context.go_path, 'src/github.com/hyperledger/fabric')
-    context.peer_exe = os.path.join(context.fabric_dir, 'build/bin/peer')
-    context.sample_chaincode_path = {
-        'golang':'github.com/hyperledger/fabric/examples/chaincode/go/chaincode_example02',
-        'java':'examples/chaincode/java/SimpleSample'
-    }
-    context.sample_chaincode_ctor_args = {
-        'golang':'{"Args":["init", "a", "100", "b", "200"]}',
-        'java':'{"Args": ["init", "a", "100", "b", "200"]}'
-    }
-
-def after_scenario(context, scenario):
-    # collect logs if failure
-    if context.failed:
-        open(re.sub('\W+', '_', scenario.name).lower() + '_peer.log', 'w').write(subprocess.check_output(['docker', 'logs', context.peer_container_id], stderr=subprocess.STDOUT))
-        open(re.sub('\W+', '_', scenario.name).lower() + '_orderer.log', 'w').write(subprocess.check_output(['docker', 'logs', context.orderer_container_id], stderr=subprocess.STDOUT))
-    # teardown docker containers & network
-    if getattr(context, 'peer_container_id', None):
-        subprocess.check_output(['docker', 'rm', '--force', '--volumes', context.peer_container_id], stderr=subprocess.STDOUT)
-    if getattr(context, 'orderer_container_id', None):
-        subprocess.check_output(['docker', 'rm', '--force', '--volumes', context.orderer_container_id], stderr=subprocess.STDOUT)
-    if getattr(context, 'network_id', None):
-        subprocess.check_output(['docker', 'network', 'rm', context.network_id], stderr=subprocess.STDOUT)
diff --git a/peer/chaincode/features/install.feature b/peer/chaincode/features/install.feature
deleted file mode 100644
index 18188bc261b..00000000000
--- a/peer/chaincode/features/install.feature
+++ /dev/null
@@ -1,26 +0,0 @@
-Feature: Install chaincode via CLI
-
-Scenario Outline: Install first version chaincode via CLI
-
-  Given a fabric peer and orderer
-  When a <lang> chaincode is installed via the CLI
-  Then the chaincode is installed on the peer
-
-  Examples:
-  | lang |
-  | go   |
-  | java |
-
-Scenario Outline: Install chaincode with new version
-
-  Only the first version of a chaincode (identified by chaincode name) can be
-  installed. Subsequent versions must be upgraded instead.
-
-  Given a fabric peer and orderer
-  When version one of a <lang> chaincode is installed via the CLI
-  Then installing version two of the same chaincode via the CLI will fail
-
-  Examples:
-  | lang |
-  | go   |
-  | java |
diff --git a/peer/chaincode/features/instantiate.feature b/peer/chaincode/features/instantiate.feature
deleted file mode 100644
index ac110cacd0a..00000000000
--- a/peer/chaincode/features/instantiate.feature
+++ /dev/null
@@ -1,12 +0,0 @@
-Feature: Instantiate chaincode via CLI
-
-Scenario Outline: Install & instantiate a first version chaincode via CLI
-
-  Given a fabric peer and orderer
-  When a <lang> chaincode is installed via the CLI
-  Then the chaincode can be instantiated via the CLI
-
-  Examples:
-  | lang |
-  | go   |
-  | java |
diff --git a/peer/chaincode/features/steps/steps.py b/peer/chaincode/features/steps/steps.py
deleted file mode 100644
index 9eb16b0e664..00000000000
--- a/peer/chaincode/features/steps/steps.py
+++ /dev/null
@@ -1,126 +0,0 @@
-from behave import *
-import os
-import random
-import subprocess
-import tempfile
-import time
-import socket
-
-@step(u'a fabric peer and orderer')
-def step_impl(context):
-
-    # create network
-    context.network_name = 'behave_' + ''.join(random.choice('0123456789') for i in xrange(7))
-    context.network_id = subprocess.check_output([
-        'docker', 'network', 'create', context.network_name
-    ]).strip()
-
-    # start orderer
-    context.orderer_container_id = subprocess.check_output([
-        'docker', 'run', '-d', '-p', '7050',
-        '--expose', '7050',
-        '--network', context.network_name,
-        '--network-alias', 'orderer',
-        '--env', 'ORDERER_GENERAL_LISTENADDRESS=0.0.0.0',
-        'hyperledger/fabric-orderer'
-    ]).strip()
-    context.orderer_address = subprocess.check_output(['docker', 'port', context.orderer_container_id, '7050']).strip()
-
-    # start peer
-    context.peer_container_id = subprocess.check_output([
-        'docker', 'run', '-d', '-p', '7051',
-        '--network', context.network_name,
-        '--network-alias', 'vp0',
-        '--env', 'CORE_PEER_ADDRESSAUTODETECT=true',
-        '--env', 'CORE_PEER_ID=vp0',
-        '--env', 'CORE_PEER_COMMITTER_LEDGER_ORDERER=orderer:7050',
-        '--env', 'CORE_CHAINCODE_STARTUPTIMEOUT=5000',
-        '--volume', '/var/run/docker.sock:/var/run/docker.sock',
-        'hyperledger/fabric-peer',
-        'peer', 'node', 'start', '--logging-level', 'debug'
-    ]).strip()
-    context.peer_address = subprocess.check_output(['docker', 'port', context.peer_container_id, '7051']).strip()
-    time.sleep(1)
-
-    # setup env for peer cli commands
-    context.peer_env = os.environ.copy()
-    context.peer_env['CORE_PEER_ADDRESS'] = context.peer_address
-    context.peer_env['CORE_PEER_COMMITTER_LEDGER_ORDERER'] = context.orderer_address
-
-@step(r'a (?P<lang>java|go|golang|car) chaincode is installed via the CLI')
-def step_impl(context, lang):
-    context.chaincode_lang = 'golang' if lang == 'go' else lang
-    context.chaincode_id_name = lang + '_cc_' + ''.join(random.choice('0123456789') for i in xrange(7))
-    context.chaincode_id_version = '1.0.0.0'
-    try:
-        print(subprocess.check_output([
-            context.peer_exe, 'chaincode', 'install',
-            '--logging-level', 'debug',
-            '--name', context.chaincode_id_name,
-            '--path', context.sample_chaincode_path[context.chaincode_lang],
-            '--version', context.chaincode_id_version,
-            '--lang', context.chaincode_lang
-        ], cwd=context.fabric_dir, stderr=subprocess.STDOUT, env=context.peer_env))
-    except subprocess.CalledProcessError as e:
-        print(e.output)
-        print('CORE_PEER_ADDRESS = ' + context.peer_env['CORE_PEER_ADDRESS'])
-        print('CORE_PEER_COMMITTER_LEDGER_ORDERER = ' + context.peer_env['CORE_PEER_COMMITTER_LEDGER_ORDERER'])
-        raise
-
-@step(u'the chaincode is installed on the peer')
-def step_impl(context):
-    print(subprocess.check_output([
-        'docker', 'exec', context.peer_container_id, 'ls', '-l', '/var/hyperledger/production/chaincodes/' + context.chaincode_id_name + '.' + context.chaincode_id_version
-    ]))
-
-@step(r'version (?P<version>\S+) of a (?P<lang>java|go|golang|car) chaincode is installed via the CLI')
-def step_impl(context, version, lang):
-    context.chaincode_lang = 'golang' if lang == 'go' else lang
-    context.chaincode_id_name = lang + '_cc_' + ''.join(random.choice('0123456789') for i in xrange(7))
-    context.chaincode_id_version = version
-    try:
-        print(subprocess.check_output([
-            context.peer_exe, 'chaincode', 'install',
-            '--logging-level', 'debug',
-            '--name', context.chaincode_id_name,
-            '--path', context.sample_chaincode_path[context.chaincode_lang],
-            '--version', context.chaincode_id_version,
-            '--lang', context.chaincode_lang
-        ], cwd=context.fabric_dir, stderr=subprocess.STDOUT, env=context.peer_env))
-    except subprocess.CalledProcessError as e:
-        print(e.output)
-        raise
-
-@step(r'installing version (?P<version>\S+) of the same chaincode via the CLI will fail')
-def step_impl(context, version):
-    assert getattr(context, 'chaincode_id_name', None), 'No chaincode previously installed.'
-    context.chaincode_id_version = version
-    try:
-        print(subprocess.check_output([
-            context.peer_exe, 'chaincode', 'install',
-            '--logging-level', 'debug',
-            '--name', context.chaincode_id_name,
-            '--path', context.sample_chaincode_path[context.chaincode_lang],
-            '--version', context.chaincode_id_version,
-            '--lang', context.chaincode_lang
-        ], cwd=context.fabric_dir, stderr=subprocess.STDOUT, env=context.peer_env))
-    except subprocess.CalledProcessError as e:
-        print(e.output)
-        raise
-
-@step(u'the chaincode can be instantiated via the CLI')
-def step_impl(context):
-    assert getattr(context, 'chaincode_id_name', None), 'No chaincode previously installed.'
-    try:
-        print(subprocess.check_output([
-            context.peer_exe, 'chaincode', 'instantiate',
-            '--logging-level', 'debug',
-            '--name', context.chaincode_id_name,
-            '--path', context.sample_chaincode_path[context.chaincode_lang],
-            '--version', context.chaincode_id_version,
-            '--lang', context.chaincode_lang,
-            '--ctor', context.sample_chaincode_ctor_args[context.chaincode_lang]
-        ], cwd=context.fabric_dir, stderr=subprocess.STDOUT, env=context.peer_env))
-    except subprocess.CalledProcessError as e:
-        print(e.output)
-        raise