creating a distribution list

[hkadhim]

hi all,
can i create a distribution a list using other users contacts?. I have 2
user accounts, i gave the second user 'owner' permission to user 1 contacts
folder (now user 2 can see all contacts in user 1 contact folder). when i
try to create a distribution list i can't see user 1 contact folder from the
distirbution list dialog box drop down menu.
user 2 has full permission to user 1 contact folder. I even enabled
delefation from user 1 and added user 2 to it.

anyone knows what am i doing wrong?

thanks,