Thank you for writing.
The reason for the observed error is that the our Demo application does not have read/write access
to the database file.
I have logged this issue in our Public Issue Tracking System - PITS. You can track its progress, subscribe for status changes and add your vote/comment to it on the following link - PITS Issue
I have also updated your Telerik points for bringing this issue to our attention.
Should you have any other questions or suggestions, do not hesitate to contact us.
the Telerik team