diff --git a/spring-hibernate3/src/main/java/org/baeldung/spring/PersistenceConfigHibernate3.java b/spring-hibernate3/src/main/java/org/baeldung/spring/PersistenceConfigHibernate3.java
new file mode 100644
index 0000000000..a128d8848c
--- /dev/null
+++ b/spring-hibernate3/src/main/java/org/baeldung/spring/PersistenceConfigHibernate3.java
@@ -0,0 +1,81 @@
+package org.baeldung.spring;
+
+import java.util.Properties;
+
+import javax.sql.DataSource;
+
+import org.apache.tomcat.dbcp.dbcp2.BasicDataSource;
+import org.hibernate.SessionFactory;
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.context.annotation.Bean;
+import org.springframework.context.annotation.ComponentScan;
+import org.springframework.context.annotation.Configuration;
+import org.springframework.context.annotation.PropertySource;
+import org.springframework.core.env.Environment;
+import org.springframework.core.io.ClassPathResource;
+import org.springframework.core.io.Resource;
+import org.springframework.dao.annotation.PersistenceExceptionTranslationPostProcessor;
+import org.springframework.orm.hibernate3.HibernateTransactionManager;
+import org.springframework.orm.hibernate3.LocalSessionFactoryBean;
+import org.springframework.transaction.annotation.EnableTransactionManagement;
+
+import com.google.common.base.Preconditions;
+
+@Configuration
+@EnableTransactionManagement
+@PropertySource({ "classpath:persistence-h2.properties" })
+@ComponentScan({ "org.baeldung.persistence.dao", "org.baeldung.persistence.service" })
+public class PersistenceConfigHibernate3 {
+    
+    @Autowired
+    private Environment env;
+
+    public PersistenceConfigHibernate3() {
+        super();
+    }
+    
+    @Bean
+    public LocalSessionFactoryBean sessionFactory() {
+        final LocalSessionFactoryBean sessionFactory = new LocalSessionFactoryBean();
+        Resource config = new ClassPathResource("exceptionDemo.cfg.xml");
+        sessionFactory.setDataSource(dataSource());
+        sessionFactory.setConfigLocation(config);
+        sessionFactory.setHibernateProperties(hibernateProperties());
+
+        return sessionFactory;
+    }
+    
+    @Bean
+    public DataSource dataSource() {
+        final BasicDataSource dataSource = new BasicDataSource();
+        dataSource.setDriverClassName(Preconditions.checkNotNull(env.getProperty("jdbc.driverClassName")));
+        dataSource.setUrl(Preconditions.checkNotNull(env.getProperty("jdbc.url")));
+        dataSource.setUsername(Preconditions.checkNotNull(env.getProperty("jdbc.user")));
+        dataSource.setPassword(Preconditions.checkNotNull(env.getProperty("jdbc.pass")));
+
+        return dataSource;
+    }
+
+    @Bean
+    @Autowired
+    public HibernateTransactionManager transactionManager(final SessionFactory sessionFactory) {
+        final HibernateTransactionManager txManager = new HibernateTransactionManager();
+        txManager.setSessionFactory(sessionFactory);
+
+        return txManager;
+    }
+
+    @Bean
+    public PersistenceExceptionTranslationPostProcessor exceptionTranslation() {
+        return new PersistenceExceptionTranslationPostProcessor();
+    }
+
+    final Properties hibernateProperties() {
+        final Properties hibernateProperties = new Properties();
+        hibernateProperties.setProperty("hibernate.hbm2ddl.auto", env.getProperty("hibernate.hbm2ddl.auto"));
+        hibernateProperties.setProperty("hibernate.dialect", env.getProperty("hibernate.dialect"));
+        // hibernateProperties.setProperty("hibernate.globally_quoted_identifiers", "true");
+        return hibernateProperties;
+    }
+
+}
diff --git a/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen1MainIntegrationTest.java b/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen1MainIntegrationTest.java
new file mode 100644
index 0000000000..d53c4445a8
--- /dev/null
+++ b/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen1MainIntegrationTest.java
@@ -0,0 +1,43 @@
+package org.baeldung.persistence.service;
+
+import java.util.List;
+
+import org.baeldung.persistence.model.Event;
+import org.baeldung.spring.PersistenceConfigHibernate3;
+import org.hamcrest.core.IsInstanceOf;
+import org.hibernate.HibernateException;
+import org.junit.Ignore;
+import org.junit.Rule;
+import org.junit.Test;
+import org.junit.rules.ExpectedException;
+import org.junit.runner.RunWith;
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.test.context.ContextConfiguration;
+import org.springframework.test.context.junit4.SpringJUnit4ClassRunner;
+import org.springframework.test.context.support.AnnotationConfigContextLoader;
+
+@RunWith(SpringJUnit4ClassRunner.class)
+@ContextConfiguration(classes = { PersistenceConfigHibernate3.class }, loader = AnnotationConfigContextLoader.class)
+public class HibernateExceptionScen1MainIntegrationTest {
+
+    @Autowired
+    EventService service;
+    
+    @Rule
+    public ExpectedException expectedEx = ExpectedException.none();
+    
+    @Test
+    public final void whenEntityIsCreated_thenNoExceptions() {
+        service.create(new Event("from LocalSessionFactoryBean"));
+    }
+    
+    @Test
+    @Ignore
+    public final void whenNoTransBoundToSession_thenException() {
+        expectedEx.expectCause(IsInstanceOf.<Throwable>instanceOf(HibernateException.class));
+        expectedEx.expectMessage("No Hibernate Session bound to thread, "
+             + "and configuration does not allow creation "
+             + "of non-transactional one here");
+        service.create(new Event("from LocalSessionFactoryBean"));
+    }
+}
diff --git a/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen2MainIntegrationTest.java b/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen2MainIntegrationTest.java
new file mode 100644
index 0000000000..84cafe0536
--- /dev/null
+++ b/spring-hibernate3/src/test/java/org/baeldung/persistence/service/HibernateExceptionScen2MainIntegrationTest.java
@@ -0,0 +1,45 @@
+package org.baeldung.persistence.service;
+
+import java.util.List;
+
+import org.baeldung.persistence.model.Event;
+import org.baeldung.spring.PersistenceConfig;
+import org.hamcrest.core.IsInstanceOf;
+import org.hibernate.HibernateException;
+import org.junit.Ignore;
+import org.junit.Rule;
+import org.junit.Test;
+import org.junit.rules.ExpectedException;
+import org.junit.runner.RunWith;
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.test.context.ContextConfiguration;
+import org.springframework.test.context.junit4.SpringJUnit4ClassRunner;
+import org.springframework.test.context.support.AnnotationConfigContextLoader;
+
+
+@RunWith(SpringJUnit4ClassRunner.class)
+@ContextConfiguration(classes = { PersistenceConfig.class }, loader = AnnotationConfigContextLoader.class)
+public class HibernateExceptionScen2MainIntegrationTest {
+    
+    @Autowired
+    EventService service;
+    
+    @Rule
+    public ExpectedException expectedEx = ExpectedException.none();
+    
+    @Test
+    public final void whenEntityIsCreated_thenNoExceptions() {
+        service.create(new Event("from AnnotationSessionFactoryBean"));
+    }
+    
+    @Test
+    @Ignore
+    public final void whenNoTransBoundToSession_thenException() {
+        expectedEx.expectCause(IsInstanceOf.<Throwable>instanceOf(HibernateException.class));
+        expectedEx.expectMessage("No Hibernate Session bound to thread, "
+             + "and configuration does not allow creation "
+             + "of non-transactional one here");
+        service.create(new Event("from AnnotationSessionFactoryBean"));
+    }
+
+}