I think you've got a couple of options.

First, if you don't really need a cursor, you could use a temp. table. If you create the temp table in Proc1 and then call Proc2 from within Proc1, the temp table is visible to Proc2.

SQL Server has a Cursor datatype that allows you to pass a reference to a cursor in an Output parameter. I've not had an reason to use it and I have no idea how it works.

-Mike