ORA-25104: UNRECOVERABLE option can only be used with ALTER INDEX REBUILD
Cause : The UNRECOVERABLE option to ALTER INDEX was used without the REBUILD option.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Use ALTER INDEX REBUILD.
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.