diff --git a/test/contracts/answer-locals/answer-locals.wat b/test/contracts/answer-locals/answer-locals.wat
index 22fd8d03f..02ad07671 100644
--- a/test/contracts/answer-locals/answer-locals.wat
+++ b/test/contracts/answer-locals/answer-locals.wat
@@ -2,12 +2,14 @@
   (type (;0;) (func (param i64)))
   (type (;1;) (func))
   (import "env" "int64finish" (func (;0;) (type 0)))
-  (func (;1;) (type 1)
-    (local i64 i64 i64 i64 i64)
+  (func (;1;) (type 1))
+  (func (;2;) (type 1)
+    (local i64 i64 i64 i64)
     i64.const 42
     call 0)
   (table (;0;) 1 1 funcref)
   (memory (;0;) 2)
   (global (;0;) (mut i32) (i32.const 66560))
   (export "memory" (memory 0))
-  (export "answer" (func 1)))
+  (export "init" (func 1))
+	(export "answer" (func 2)))
diff --git a/test/contracts/answer-locals/output/answer-locals.wasm b/test/contracts/answer-locals/output/answer-locals.wasm
index fe42715f7..b6b8d92dc 100644
Binary files a/test/contracts/answer-locals/output/answer-locals.wasm and b/test/contracts/answer-locals/output/answer-locals.wasm differ
diff --git a/test/contracts/counter/counter.c b/test/contracts/counter/counter.c
index f0c4230fc..91dbac918 100644
--- a/test/contracts/counter/counter.c
+++ b/test/contracts/counter/counter.c
@@ -7,6 +7,10 @@ void init() {
     int64storageStore(COUNTER_KEY, COUNTER_KEY_LEN, 1);
 }
 
+void upgrade() {
+    int64storageStore(COUNTER_KEY, COUNTER_KEY_LEN, 1);
+}
+
 void increment() {
     i64 counter = int64storageLoad(COUNTER_KEY, COUNTER_KEY_LEN);
     counter++;
diff --git a/test/contracts/counter/counter.export b/test/contracts/counter/counter.export
index 91723bf1b..82ad4d916 100644
--- a/test/contracts/counter/counter.export
+++ b/test/contracts/counter/counter.export
@@ -1,4 +1,5 @@
 init
+upgrade
 increment
 decrement
 get
diff --git a/test/contracts/counter/output/counter.wasm b/test/contracts/counter/output/counter.wasm
old mode 100755
new mode 100644
index 4f31dbb4b..97d854c17
Binary files a/test/contracts/counter/output/counter.wasm and b/test/contracts/counter/output/counter.wasm differ
diff --git a/test/contracts/counter/output/counter.wat b/test/contracts/counter/output/counter.wat
index 50471c3bd..4403b2732 100644
--- a/test/contracts/counter/output/counter.wat
+++ b/test/contracts/counter/output/counter.wat
@@ -1,56 +1,197 @@
 (module
-  (type $t0 (func (param i32 i32 i64) (result i32)))
-  (type $t1 (func (param i32 i32) (result i64)))
-  (type $t2 (func (param i64)))
-  (type $t3 (func))
-  (import "env" "int64storageStore" (func $env.int64storageStore (type $t0)))
-  (import "env" "int64storageLoad" (func $env.int64storageLoad (type $t1)))
-  (import "env" "int64finish" (func $env.int64finish (type $t2)))
-  (func $init (type $t3)
+  (type (;0;) (func (param i32 i32 i64) (result i32)))
+  (type (;1;) (func (param i32 i32) (result i64)))
+  (type (;2;) (func (param i64)))
+  (type (;3;) (func))
+  (import "env" "int64storageStore" (func (;0;) (type 0)))
+  (import "env" "int64storageLoad" (func (;1;) (type 1)))
+  (import "env" "int64finish" (func (;2;) (type 2)))
+  (func (;3;) (type 3)
+    (local i32 i32 i64)
     i32.const 1024
+    local.set 0
     i32.const 7
+    local.set 1
     i64.const 1
-    call $env.int64storageStore
-    drop)
-  (func $increment (type $t3)
-    (local $l0 i64)
+    local.set 2
+    local.get 0
+    local.get 1
+    local.get 2
+    call 0
+    drop
+    return)
+  (func (;4;) (type 3)
+    (local i32 i32 i64)
     i32.const 1024
+    local.set 0
     i32.const 7
+    local.set 1
+    i64.const 1
+    local.set 2
+    local.get 0
+    local.get 1
+    local.get 2
+    call 0
+    drop
+    return)
+  (func (;5;) (type 3)
+    (local i32 i32 i32 i32 i32 i64 i64 i64 i64 i64 i64 i32 i32)
+    global.get 0
+    local.set 0
+    i32.const 16
+    local.set 1
+    local.get 0
+    local.get 1
+    i32.sub
+    local.set 2
+    local.get 2
+    global.set 0
     i32.const 1024
+    local.set 3
     i32.const 7
-    call $env.int64storageLoad
+    local.set 4
+    local.get 3
+    local.get 4
+    call 1
+    local.set 5
+    local.get 2
+    local.get 5
+    i64.store offset=8
+    local.get 2
+    i64.load offset=8
+    local.set 6
     i64.const 1
+    local.set 7
+    local.get 6
+    local.get 7
     i64.add
-    local.tee $l0
-    call $env.int64storageStore
+    local.set 8
+    local.get 2
+    local.get 8
+    i64.store offset=8
+    local.get 2
+    i64.load offset=8
+    local.set 9
+    local.get 3
+    local.get 4
+    local.get 9
+    call 0
     drop
-    local.get $l0
-    call $env.int64finish)
-  (func $decrement (type $t3)
-    (local $l0 i64)
-    i32.const 1024
-    i32.const 7
+    local.get 2
+    i64.load offset=8
+    local.set 10
+    local.get 10
+    call 2
+    i32.const 16
+    local.set 11
+    local.get 2
+    local.get 11
+    i32.add
+    local.set 12
+    local.get 12
+    global.set 0
+    return)
+  (func (;6;) (type 3)
+    (local i32 i32 i32 i32 i32 i64 i64 i64 i64 i64 i64 i32 i32)
+    global.get 0
+    local.set 0
+    i32.const 16
+    local.set 1
+    local.get 0
+    local.get 1
+    i32.sub
+    local.set 2
+    local.get 2
+    global.set 0
     i32.const 1024
+    local.set 3
     i32.const 7
-    call $env.int64storageLoad
+    local.set 4
+    local.get 3
+    local.get 4
+    call 1
+    local.set 5
+    local.get 2
+    local.get 5
+    i64.store offset=8
+    local.get 2
+    i64.load offset=8
+    local.set 6
     i64.const -1
+    local.set 7
+    local.get 6
+    local.get 7
     i64.add
-    local.tee $l0
-    call $env.int64storageStore
+    local.set 8
+    local.get 2
+    local.get 8
+    i64.store offset=8
+    local.get 2
+    i64.load offset=8
+    local.set 9
+    local.get 3
+    local.get 4
+    local.get 9
+    call 0
     drop
-    local.get $l0
-    call $env.int64finish)
-  (func $get (type $t3)
+    local.get 2
+    i64.load offset=8
+    local.set 10
+    local.get 10
+    call 2
+    i32.const 16
+    local.set 11
+    local.get 2
+    local.get 11
+    i32.add
+    local.set 12
+    local.get 12
+    global.set 0
+    return)
+  (func (;7;) (type 3)
+    (local i32 i32 i32 i32 i32 i64 i64 i32 i32)
+    global.get 0
+    local.set 0
+    i32.const 16
+    local.set 1
+    local.get 0
+    local.get 1
+    i32.sub
+    local.set 2
+    local.get 2
+    global.set 0
     i32.const 1024
+    local.set 3
     i32.const 7
-    call $env.int64storageLoad
-    call $env.int64finish)
-  (table $T0 1 1 funcref)
-  (memory $memory 2)
-  (global $g0 (mut i32) (i32.const 66576))
+    local.set 4
+    local.get 3
+    local.get 4
+    call 1
+    local.set 5
+    local.get 2
+    local.get 5
+    i64.store offset=8
+    local.get 2
+    i64.load offset=8
+    local.set 6
+    local.get 6
+    call 2
+    i32.const 16
+    local.set 7
+    local.get 2
+    local.get 7
+    i32.add
+    local.set 8
+    local.get 8
+    global.set 0
+    return)
+  (table (;0;) 1 1 funcref)
+  (memory (;0;) 2)
+  (global (;0;) (mut i32) (i32.const 66576))
   (export "memory" (memory 0))
-  (export "init" (func $init))
-  (export "increment" (func $increment))
-  (export "decrement" (func $decrement))
-  (export "get" (func $get))
-  (data $d0 (i32.const 1024) "COUNTER\00"))
+  (export "init" (func 3))
+  (export "upgrade" (func 4))
+  (export "increment" (func 5))
+  (export "decrement" (func 6))
+  (export "get" (func 7))
+  (data (;0;) (i32.const 1024) "COUNTER\00"))
diff --git a/vmhost/hostCore/execution.go b/vmhost/hostCore/execution.go
index 51c95912d..64aded75b 100644
--- a/vmhost/hostCore/execution.go
+++ b/vmhost/hostCore/execution.go
@@ -1150,7 +1150,7 @@ func (host *vmHost) callUpgradeFunction() error {
 func (host *vmHost) callSCFunction(functionName string) error {
 	runtime := host.Runtime()
 	if !runtime.HasFunction(functionName) {
-		return nil
+		return executor.ErrFuncNotFound
 	}
 
 	err := runtime.CallSCFunction(functionName)
diff --git a/vmhost/hosttest/execution_test.go b/vmhost/hosttest/execution_test.go
index 4db839d08..fc74f012f 100644
--- a/vmhost/hosttest/execution_test.go
+++ b/vmhost/hosttest/execution_test.go
@@ -210,7 +210,7 @@ func TestExecution_DeployWASM_Popcnt(t *testing.T) {
 func TestExecution_DeployWASM_AtMaximumLocals(t *testing.T) {
 	test.BuildInstanceCreatorTest(t).
 		WithInput(test.CreateTestContractCreateInputBuilder().
-			WithGasProvided(1000).
+			WithGasProvided(100000).
 			WithCallValue(88).
 			WithContractCode(makeBytecodeWithLocals(WASMLocalsLimit)).
 			Build()).
@@ -3687,8 +3687,9 @@ func TestExecution_Mocked_OnSameFollowedByOnDest(t *testing.T) {
 // number of i64 locals it instantiates
 func makeBytecodeWithLocals(numLocals uint64) []byte {
 	originalCode := test.GetTestSCCode("answer-locals", "../../")
-	firstSlice := originalCode[:0x5B]
-	secondSlice := originalCode[0x5C:]
+
+	firstSlice := originalCode[:0x66]
+	secondSlice := originalCode[0x67:]
 
 	encodedNumLocals := vmhost.U64ToLEB128(numLocals)
 	extraBytes := len(encodedNumLocals) - 1
@@ -3698,8 +3699,8 @@ func makeBytecodeWithLocals(numLocals uint64) []byte {
 	result = append(result, encodedNumLocals...)
 	result = append(result, secondSlice...)
 
-	result[0x57] = byte(int(result[0x57]) + extraBytes)
-	result[0x59] = byte(int(result[0x59]) + extraBytes)
+	result[0x5F] = byte(int(result[0x5F]) + extraBytes)
+	result[0x64] = byte(int(result[0x64]) + extraBytes)
 
 	return result
 }