ORA-28583: remote references are not permitted during agent callbacks
Cause : A Heterogeous Services agent issued a callback to the Oracle server which attemted to to access a remote system. This is not supported.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Make sure that SQL code issued by Heterogeneous Services agents does not reference a database link.
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.