ORA-12476: least upper bound resulted in an invalid OS label
Cause : You tried to do an operation that generated a least upper bound (LUB) label which is not a valid label on your operating system.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Consult your OS label management documentation for information on invalid label generation.
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.