I created a custom license called the Neo-MIT-License (basically the MIT license with a couple of differences). The website link is https://ndrewxie.github.io/Neo-MIT-License/
Could anybody please give me some pointers or references (pun intended) on how to remove loopholes, improve formatting and grammar, etc?
The license has very little in common with the MIT license. In text structure it's closer to the BSD license, to boot. Calling it "Neo-MIT" makes as much sense as writing an EULA and calling it GPL 4.0.
Conditions 1, 2, 3, and 4 are basically equivalent to CC BY-NC-SA.
The exception on condition 3 is redundant. An author is always able to make one-off licenses for individual prospective licensees.
Condition 4 is probably redundant. Condition 1 already requires that derivative works include the license, which by my interpretation means that derivative works must be licensed under the same license.
Finally, I don't really see the point of condition 5. Let's say that A licenses C to B, and B does use C to break the law, and this fact comes to light. Now C goes to jail, or pays a fine, whatever. What's A going to do? Sue C? What would be the point of that?