The server.properties sets server wide properties for your Axiom instance. It should be located in the root of the Axiom instance (in the same directory as the start.bat/start.sh scripts). Properties you can set in this file:
imagemagick = /path/to/directory/containing/convert
Required for Image APISpecifies the filesystem location of theImagemagickconvertexecutable, which is used for image resizing and thumbnail creation.