Submission ? Sending out queries and a writing contest

I'm looking for advice on submissions. Is it okay enter the first two chapters of my novel for the Pen Award and also send out queries? I currently am awaiting the answer on a query and I'm not sure of the proper etiquette. If the agent ask for chapters or the manuscript do I say I've entered the contest?
If the agent isn't interested can I keep sending out queries while entered?
very confused..thanks for any advice.

Thanks so much. I've been going through every book I have on agents to find the answer!

Of course, a picture of your kids would be great...