Problems syncing contact folders with Outlook and phones using Office 365 Hosted Exchange

Hi,

This is a little complicated, so I've tried to organize the question as much as possible:

Equipment and software

1. Both users have Android phones.
2. User 1 has a laptop with Windows 8 Professional
3. User 2 has a laptop with Windows 7 Professional
4. Both users use Outlook 2010
5. Both users have Office 365 Hosted Exchange (only)

Objectives:

1. User 1 has a contact list with 35 contact subfolders that are updated very regularly
2. User 2 wants to share those contacts and (if possible) add to them or edit them himself. When either updates a contact, they want the changes to automatically update in both Outlooks and both phones.
3. Both users want access to these shared contact folders both in Outlook and on their phones (that so far has proved impossible)
4. They would both like to continue having private contacts that they don’t share
5. User 1 would like to be able to search through all the folders at once for a contact by name

Solutions tried:

1. We tried Google for Business but found no way to keep365 contact folders updating in either Outlook or the phones.
2. I moved them to Office 365 and shared all the subfolders to the other user by using the share dialog on User 1’s Outlook and receiving and choosing to save each shared folder in User 2’s Outlook. This worked very well for Outlook but the subfolders were not apparent on the Android email app.
3. After doing a little research we installed Touchdown for Android on both phones. This allowed us to see the subfolders on User 1’s Android but the subfolders (installed as shares) on User 2’s Outlook were not visible in Touchdown (meaning they were not installed on the server only in Outlook.
4. After reading about Global Address Lists, I thought I would try moving all these external contacts into the GAL and add a category to each corresponding to the subfolder (you know like Architects or Painters, etc.) I figured they could open the address book and search by category. So far, using directions found in various forums, I’ve had various technical problems trying to upload the external contacts. I am especially confused about preparing the CSV file (I tried following the instructions but still get a lot of errors.

So before I get deeper into solving the CSV file dilemma, I thought I’d check with the experts to see if I’m even going down the right path! If I put a couple of hundred categorized contacts into the GAL, will it accomplish my goals or not?

1. Will both users have read / write access to the external contacts in Outlook and on their Androids? (We’d still be using Touchdown unless it’s a barrier because the client likes the app.)
2. It’s apparent they could both share the same contacts by using the same Exchange account. But the Touchdown app only allows one Exchange account at a time. I suppose they could use share User 1’s Exchange account and User 2 could retrieve his email by POP. But he would no longer have his personal contacts, tasks, or calendars available.
3. They used to use Plaxo but were unhappy about the mapping between Outlook, their phones, and Plaxo. They would get their contacts corrupted and out of sync.

Thanks in advance for any help.  I’m open to any advice.  I’m also willing to tough out the export of names to the GAL if it will accomplish anything.  But the lake is a little cold right now so I’m not jumping in it!