Periodic arrays of elongated cobalt islands exchange coupled to continuous Permalloy thin films were fabricated using silicon nitride stencil masks and the magnetic spin configurations during magnetization reversal were studied with photoemission electron microscopy. The presence of cobalt islands results in a spatial modulation of the magnetic properties of the Permalloy films and domain walls positioned at the island boundaries. While magneto-optical Kerr effect measurements indicate differences depending on film thickness, the direct observations reveal two reversal mechanisms: formation of domains running between the islands and coherent rotation followed by propagation of a large domain.