Key problem after dropping it from a bicycle seat bag
 

I have two main keys to my 04 X3 and they were both 100% functional until one of the keys fell off the seat bag on my bicycle at around 8-10mph and hit the ground. I picked it up and it looked fine other than a few nicks on the plastic part. However, the trouble began when I tried to start up the engine. Unlocking of the doors, tailgate and all the electronic stuff worked but there's no noise at all when I tried to crank start the engine. It seemed like the car didn't recognize the key so it wouldn't start up. When I put the 2nd master key in and turn it either to position I or II and re-insert the 1st key it would work just fine - the engine would start up.

Can anyone tell me if and how I can fix this problem with the possibly damaged key? Please help.