How to export a mesh that has armature modifier and is parented to armature to SMD?

I have this mesh and I parented it to a bone of an armature.
So I already made the vertex groups and weight painted it to the bones.
I then added the armature modifier to the mesh so that the vertex groups would work and move.

However, when I try to export it to SMD format using SMD tools, I get this warning that my armature modifier is ignored because my mesh (which is parented to a bone of an armature) already has an envelope.
So when I test the mesh in-game, it is stiff or frozen.

Anyone know how to go around this problem? Or do I use a different modifier for my vertex groups?