Check your folders - and stop using relative paths. They have a tendency to fail because the page is moved (or copied) to a different folder on the webserver. Use an absolute path instead:
Server.MapPath(@"~/Images/out1/preview3.Jpg")
If you look, you will find that the folder "out1" probably doesn't exist, or if it does, it doesn't have the required access permissions to let you app write to it.
But...once you "go live" you will have bigger problems: when you get two users trying to do the same thing at the same time, your fixed file names will cause problems because the file will be in use...