We present magnetoresistance (MR) measurements performed on magnetic tunnel junctions in which one of the electrodes is a granular ferromagnetic film. These junctions exhibit a zero field resistance dip. The dip magnitude depends on the size of the grains. We interpret these results as a consequence of the orange peel effect between the continuous ferromagnetic film and the magnetic grains. The coupling is found to be much stronger than that between continuous ferromagnetic layers. PACS: 75.70.Ak, 75.47.De, 75.75.+a GMR (giant magnetoresistance) and TMR (tunneling magnetoresistance) devices are primary candidates in future magneto-electronic applications and media [1,2,3,4,5]. The ability to create arrays of magnetic junctions on micro sized areas can enhance storage size drastically and enable the production of non volatile ultra-dense RAM chips. Granular ferromagnets have a promising potential to act as a further step in this direction since a single junction may be able support numerous bits, considerably increasing the possible storage densities.All applications based on GMR and TMR effects require high quality multilayers constructed of thin ferromagnetic and non-magnetic films. The performance of the devices depend strongly on the morphological and structural properties of the films as well as their physical characteristics. Among the crucial factors is the interlayer coupling between two ferromagnetic layers separated by a non-magnetic spacer. This coupling may be a sum of several different mechanisms, of which three appear to be dominant. The first is pinhole coupling, which results from structural defects in the spacer and may destroy MR effects altogether. The second is the RKKY interaction which oscillates with the spacer thickness. This coupling is due to indirect exchange mechanism and applies only to conductive barriers (GMR multilayers). The third mechanism is the Néel Coupling [6], also named Orange Peel Effect (OPE), which applies both to conducting and to insulating spacers. This coupling utilizes the surface waviness of correlated layers to produce ferromagnetic interaction between ferromagnetic layers that could otherwise be antiferromagnetically coupled. The mechanism is based on the fact that the waviness of the magnetic film creates dipoles on the surface. A second layer with correlated waviness placed on top and separated by a non-magnetic spacer, experiences similar moment orientation due to dipole-dipole interaction as illustrated in figure 1a. Such ferromagnetic coupling reduces the GMR signal which requires antiferromagnetic orientation at low fields. Hence, a lot of effort is invested in an attempt to minimize this coupling in order to improve the performance of GMR/TMR elements [7,8,9,10,11,12]. The basic Néel model was derived for two infinitely thick magnetic layers separated by a non magnetic spacer [6]. Kools et al [13] extended the theory to included the finite size of the magnetic layers and obtained the following expression for the coupling strength:where h and λ are the a...