Hello Henry G,
As it mentions that As <sid>adm configure the system user password in the local userstore under the key SRTAKEOVER. The system user password is needed to import the repository content of the new version of the software during the takeover process:
From the above words, I guess it is done at the secondary system because the takeover command is executed on the secondary site (I do not do NZDT with SR before). 
The hostname has to be the public host name of the host that the command is executed on and the port is its SQL port number.
Regards,
Ning Tong