Cannot add toolbox to path (R2012a)

I go File > Set Path and I add eml toolbox and its subfolders. When I click Save a popup window informs me "Matlab cannot save changes to the path." It prompts to save pathdef somewhere else. I am on windows 7 but I have turned of UAC. No difference. I also copied the pathdef.m to bin which is the startup folder and then tried to find $USERPATH so that I can follow instruction from http://www.mathworks.com/matlabcentral/answers/102037-how-can-i-move-the-pathdef-m-file-from-its-default-location-to-another-location-in-matlab-8-1-r20 But userpath command outputs '' empty string.

I set it again and I follow the instructions in the link but it couldn't find pathdef after that. So what happens please? This does not happen with other toolboxes eg signal. It only happens with eml. Is there something special about it?