Is MODS.BP the file you're editing or something that the tool wants to open?
Former: make sure to use $File instead of $FileName, because it includes the absolute path.
Latter: start the tool with all parameters it needs, and make sure TextPad's setting "Initial folder" is set accordingly (most likely $FileDir is what you want, but it may be a different one).
You can look at the help for all possible placeholders in Reference Information > Tool Parameter Macros.