ORA-01588: must use RESETLOGS option for database open
Cause : An earlier attempt to open the database with the RESETLOGS option did not complete, or recovery was done with a control file backup, or a FLASHBACK DATABASE was done.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Use the RESETLOGS option when opening the database.
Well, the reason for above error is that i have taken the above script from a 11g database and running it on 10g database. 11g has bring some changes in password management. Below code is executed on 11g and user created successfully, which is expected result.