diff --git a/ethcore/src/client/client.rs b/ethcore/src/client/client.rs
index 6eda89a7c..d55d884a4 100644
--- a/ethcore/src/client/client.rs
+++ b/ethcore/src/client/client.rs
@@ -24,13 +24,11 @@ use time::precise_time_ns;
 // util
 use util::{Bytes, PerfTimer, Itertools, Mutex, RwLock};
 use util::{journaldb, TrieFactory, Trie};
-use util::{U256, H256, H520, Address, H2048, Uint, FixedHash};
-use util::sha3::*;
+use util::{U256, H256, Address, H2048, Uint, FixedHash};
 use util::trie::TrieSpec;
 use util::kvdb::*;
 
 // other
-use ethkey::recover;
 use io::*;
 use views::{HeaderView, BodyView, BlockView};
 use error::{ImportError, ExecutionError, CallError, BlockError, ImportResult, Error as EthcoreError};
diff --git a/ethcore/src/engines/tendermint/message.rs b/ethcore/src/engines/tendermint/message.rs
index 32faec72b..4fcbd3e52 100644
--- a/ethcore/src/engines/tendermint/message.rs
+++ b/ethcore/src/engines/tendermint/message.rs
@@ -19,7 +19,6 @@
 use util::*;
 use super::{Height, Round, BlockHash, Step};
 use rlp::*;
-use error::Error;
 
 #[derive(Debug, PartialEq, Eq, Clone)]
 pub struct ConsensusMessage {
@@ -37,7 +36,13 @@ impl ConsensusMessage {
 		s.append(&round);
 		s.append(&step);
 		s.append(&block_hash.unwrap_or(H256::zero()));
-		Some(s.out())
+		let block_info = s.out();
+		signer(block_info.sha3()).map(|ref signature| {
+			let mut s = RlpStream::new_list(2);
+			s.append(signature);
+			s.append(&block_info);
+			s.out()
+		})
 	}
 
 	pub fn is_height(&self, height: Height) -> bool {
diff --git a/ethcore/src/engines/tendermint/mod.rs b/ethcore/src/engines/tendermint/mod.rs
index 02cd114b5..1974858e5 100644
--- a/ethcore/src/engines/tendermint/mod.rs
+++ b/ethcore/src/engines/tendermint/mod.rs
@@ -17,7 +17,7 @@
 //! Tendermint BFT consensus engine with round robin proof-of-authority.
 
 mod message;
-mod timeout;
+mod transition;
 mod params;
 mod vote_collector;
 
@@ -29,7 +29,7 @@ use header::Header;
 use builtin::Builtin;
 use env_info::EnvInfo;
 use transaction::SignedTransaction;
-use rlp::{UntrustedRlp, View, encode};
+use rlp::{UntrustedRlp, View};
 use ethkey::{recover, public_to_address};
 use account_provider::AccountProvider;
 use block::*;
@@ -41,7 +41,7 @@ use evm::Schedule;
 use io::{IoService, IoChannel};
 use service::ClientIoMessage;
 use self::message::ConsensusMessage;
-use self::timeout::TransitionHandler;
+use self::transition::TransitionHandler;
 use self::params::TendermintParams;
 use self::vote_collector::VoteCollector;
 
@@ -57,7 +57,6 @@ pub type Height = usize;
 pub type Round = usize;
 pub type BlockHash = H256;
 
-pub type AtomicMs = AtomicUsize;
 type Signatures = Vec<Bytes>;
 
 /// Engine using `Tendermint` consensus algorithm, suitable for EVM chain.
@@ -169,12 +168,8 @@ impl Tendermint {
 				self.update_sealing()
 			},
 			Step::Prevote => {
-				let should_unlock = |lock_change_round| { 
-					self.last_lock.load(AtomicOrdering::SeqCst) < lock_change_round
-						&& lock_change_round < self.round.load(AtomicOrdering::SeqCst)
-				};
 				let block_hash = match *self.lock_change.read() {
-					Some(ref m) if should_unlock(m.round) => self.proposal.read().clone(),
+					Some(ref m) if self.should_unlock(m.round) => self.proposal.read().clone(),
 					Some(ref m) => m.block_hash,
 					None => None,
 				};
@@ -210,7 +205,7 @@ impl Tendermint {
 
 	fn nonce_proposer(&self, proposer_nonce: usize) -> &Address {
 		let ref p = self.our_params;
-		p.authorities.get(proposer_nonce % p.authority_n).unwrap()
+		p.authorities.get(proposer_nonce % p.authority_n).expect("There are authority_n authorities; taking number modulo authority_n gives number in authority_n range; qed")
 	}
 
 	fn is_nonce_proposer(&self, proposer_nonce: usize, address: &Address) -> bool {
@@ -230,7 +225,7 @@ impl Tendermint {
 		self.is_nonce_proposer(self.proposer_nonce.load(AtomicOrdering::SeqCst), address)
 	}
 
-	fn is__height(&self, message: &ConsensusMessage) -> bool {
+	fn is_height(&self, message: &ConsensusMessage) -> bool {
 		message.is_height(self.height.load(AtomicOrdering::SeqCst)) 
 	}
 
@@ -238,12 +233,31 @@ impl Tendermint {
 		message.is_round(self.height.load(AtomicOrdering::SeqCst), self.round.load(AtomicOrdering::SeqCst)) 
 	}
 
+	fn increment_round(&self, n: Round) {
+		self.proposer_nonce.fetch_add(n, AtomicOrdering::SeqCst);
+		self.round.fetch_add(n, AtomicOrdering::SeqCst);
+	}
+
+	fn reset_round(&self) {
+		self.last_lock.store(0, AtomicOrdering::SeqCst);
+		self.proposer_nonce.fetch_add(1, AtomicOrdering::SeqCst);
+		self.height.fetch_add(1, AtomicOrdering::SeqCst);
+		self.round.store(0, AtomicOrdering::SeqCst);
+	}
+
+	fn should_unlock(&self, lock_change_round: Round) -> bool { 
+		self.last_lock.load(AtomicOrdering::SeqCst) < lock_change_round
+			&& lock_change_round < self.round.load(AtomicOrdering::SeqCst)
+	}
+
+
 	fn has_enough_any_votes(&self) -> bool {
 		self.votes.count_step_votes(self.height.load(AtomicOrdering::SeqCst), self.round.load(AtomicOrdering::SeqCst), *self.step.read()) > self.threshold()	
 	}
 
-	fn has_enough_step_votes(&self, message: &ConsensusMessage) -> bool {
-		self.votes.count_step_votes(message.height, message.round, message.step) > self.threshold()	
+	fn has_enough_future_step_votes(&self, message: &ConsensusMessage) -> bool {
+		message.round > self.round.load(AtomicOrdering::SeqCst)
+			&& self.votes.count_step_votes(message.height, message.round, message.step) > self.threshold()	
 	}
 
 	fn has_enough_aligned_votes(&self, message: &ConsensusMessage) -> bool {
@@ -357,24 +371,24 @@ impl Engine for Tendermint {
 				&& self.has_enough_aligned_votes(&message) {
 				*self.lock_change.write()	= Some(message.clone());
 			}
-			// Check if it can affect step transition.
-			if self.is__height(&message) {
+			// Check if it can affect the step transition.
+			if self.is_height(&message) {
 				let next_step = match *self.step.read() {
 					Step::Precommit if self.has_enough_aligned_votes(&message) => {
 						if message.block_hash.is_none() {
-							self.round.fetch_add(1, AtomicOrdering::SeqCst);
+							self.increment_round(1);
 							Some(Step::Propose)
 						} else {
 							Some(Step::Commit)
 						}
 					},
-					Step::Precommit if self.has_enough_step_votes(&message) => {
-						self.round.store(message.round, AtomicOrdering::SeqCst);
+					Step::Precommit if self.has_enough_future_step_votes(&message) => {
+						self.increment_round(message.round - self.round.load(AtomicOrdering::SeqCst));
 						Some(Step::Precommit)
 					},
 					Step::Prevote if self.has_enough_aligned_votes(&message) => Some(Step::Precommit),
-					Step::Prevote if self.has_enough_step_votes(&message) => {
-						self.round.store(message.round, AtomicOrdering::SeqCst);
+					Step::Prevote if self.has_enough_future_step_votes(&message) => {
+						self.increment_round(message.round - self.round.load(AtomicOrdering::SeqCst));
 						Some(Step::Prevote)
 					},
 					_ => None,
diff --git a/ethcore/src/engines/tendermint/params.rs b/ethcore/src/engines/tendermint/params.rs
index dbed9b541..3752ae3bd 100644
--- a/ethcore/src/engines/tendermint/params.rs
+++ b/ethcore/src/engines/tendermint/params.rs
@@ -17,7 +17,7 @@
 //! Tendermint specific parameters.
 
 use ethjson;
-use super::timeout::TendermintTimeouts;
+use super::transition::TendermintTimeouts;
 use util::{Address, U256};
 use time::Duration;
 
diff --git a/ethcore/src/engines/tendermint/vote_collector.rs b/ethcore/src/engines/tendermint/vote_collector.rs
index 424759678..0f4553502 100644
--- a/ethcore/src/engines/tendermint/vote_collector.rs
+++ b/ethcore/src/engines/tendermint/vote_collector.rs
@@ -19,7 +19,6 @@
 use util::*;
 use super::message::ConsensusMessage;
 use super::{Height, Round, Step};
-use ethkey::recover;
 
 #[derive(Debug)]
 pub struct VoteCollector {