The Sassafras Keyserver authorization scheme is a way to parse out a specific number of authorizations to a large collection of machines on a server. It acts like a library where one machine holds the total number of authorizations and any machine on the network may "check out" a license. Once the software is closed and no longer in use, it returns the authorization back to the pot where it may then be used by another machine.
In addition to your Keyserver running on some machine on your network, you need to install the KeyClient software from Sassafras on all machines that will be running Max. Please check their website to ensure you have the latest version (126.96.36.199 or later); Max may not work with earlier versions. In addition, the computer running Max needs to be connected to the network so it can communicate with your Keyserver.
Max 7 or later (which includes MSP, Jitter, and Gen) is available for Keyserver.