Adobe illustrator help with merging text with image

Expand the Text (Right click and Create Outlines) first, join it into one shape (Unite tool in Pathfinder palette), then convert it into a Compound Path (CTRL+8).

Fill both the bunny shapes and subtract the center bunny on top from the bottom (larger) bunny shape to create a Compound Shape. (Use the Minus Front tool in the Pathfinder palette).

Then join the two compound paths using the Unite tool in the Pathfinder palette.

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