This paper considers the feedback interconnection of two multi-input multi-output subsystems characterized by rational transfer functions Ĝ 1 and Ĝ functions are not assumed to be proper nor exponentially stableThe effect of output disturbances on stability is taken into account. Ten examples are given to show that instabilities may appear anywhere around the loop. Next, under a sequence of successively more restrictive assumptions, we prove four sets of necessary and sufficient conditions for the exponential stability of the system. Using coprime factorizations, we obtain four equivalent expressions for the system characteristic polynomial. Two stability tests are derived, the first one is based exclusively on transfer functions, the second is based on the characteristic polynomial. The paper ends by providing translation rules for reformulating all definitions and theorems for the discrete-time case (i.e. instead of Laplace transforms use Z-transforms, etc.).