Index: src/test/java/org/apache/maven/settings/SettingsTest.java
===================================================================
--- src/test/java/org/apache/maven/settings/SettingsTest.java	(revision 0)
+++ src/test/java/org/apache/maven/settings/SettingsTest.java	(revision 0)
@@ -0,0 +1,33 @@
+package org.apache.maven.settings;
+
+import java.io.File;
+
+import junit.framework.TestCase;
+
+public class SettingsTest extends TestCase {
+
+	private Settings settingsNoProxies;
+	private Settings settingsOneInactiveProxy;
+	private Settings settingsOneActiveProxy;
+
+	
+	protected void setUp() throws Exception {
+		
+		super.setUp();
+
+		// Read different settings files for proxy testing.
+		DefaultMavenSettingsBuilder settingsBuilder = new DefaultMavenSettingsBuilder();
+		settingsNoProxies = settingsBuilder.buildSettings(new File("src/test/resources/org/apache/maven/settings/settings-no-proxies.xml"), false);
+		settingsOneInactiveProxy = settingsBuilder.buildSettings(new File("src/test/resources/org/apache/maven/settings/settings-one-inactive-proxy.xml"), false);
+		settingsOneActiveProxy = settingsBuilder.buildSettings(new File("src/test/resources/org/apache/maven/settings/settings-one-active-proxy.xml"), false);
+		
+	}
+	
+	
+	public void testProxySettings() {
+		
+		assertNull(settingsNoProxies.getActiveProxy());
+		assertNull(settingsOneInactiveProxy.getActiveProxy());
+		assertNotNull(settingsOneActiveProxy.getActiveProxy());
+	}
+}
Index: src/test/resources/org/apache/maven/settings/settings-no-proxies.xml
===================================================================
--- src/test/resources/org/apache/maven/settings/settings-no-proxies.xml	(revision 0)
+++ src/test/resources/org/apache/maven/settings/settings-no-proxies.xml	(revision 0)
@@ -0,0 +1,6 @@
+<settings>
+
+  <proxies>
+  </proxies>
+
+</settings>
Index: src/test/resources/org/apache/maven/settings/settings-one-active-proxy.xml
===================================================================
--- src/test/resources/org/apache/maven/settings/settings-one-active-proxy.xml	(revision 0)
+++ src/test/resources/org/apache/maven/settings/settings-one-active-proxy.xml	(revision 0)
@@ -0,0 +1,15 @@
+<settings>
+
+  <proxies>
+    <proxy>
+      <active>true</active>
+      <protocol>http</protocol>
+      <username>proxyuser</username>
+      <password>proxypass</password>
+      <host>proxy.host.net</host>
+      <port>80</port>
+      <nonProxyHosts>local.net,some.host.com</nonProxyHosts>
+    </proxy>
+  </proxies>
+
+</settings>
Index: src/test/resources/org/apache/maven/settings/settings-one-inactive-proxy.xml
===================================================================
--- src/test/resources/org/apache/maven/settings/settings-one-inactive-proxy.xml	(revision 0)
+++ src/test/resources/org/apache/maven/settings/settings-one-inactive-proxy.xml	(revision 0)
@@ -0,0 +1,15 @@
+<settings>
+
+  <proxies>
+    <proxy>
+      <active>false</active>
+      <protocol>http</protocol>
+      <username>proxyuser</username>
+      <password>proxypass</password>
+      <host>proxy.host.net</host>
+      <port>80</port>
+      <nonProxyHosts>local.net,some.host.com</nonProxyHosts>
+    </proxy>
+  </proxies>
+
+</settings>
Index: src/main/mdo/settings.mdo
===================================================================
--- src/main/mdo/settings.mdo	(revision 737823)
+++ src/main/mdo/settings.mdo	(working copy)
@@ -295,23 +295,15 @@
             java.util.List proxies = getProxies();
             if ( proxies != null && !proxies.isEmpty() )
             {
-                if ( proxies.size() > 1 )
+                for ( java.util.Iterator it = proxies.iterator(); it.hasNext(); )
                 {
-                    for ( java.util.Iterator it = proxies.iterator(); it.hasNext(); )
+                    Proxy proxy = (Proxy) it.next();
+                    if ( proxy.isActive() )
                     {
-                        Proxy proxy = (Proxy) it.next();
-                        if ( proxy.isActive() )
-                        {
-                            activeProxy = proxy;
-                            break;
-                        }
+                        activeProxy = proxy;
+                        break;
                     }
                 }
-                else
-                {
-                    // If we only have one proxy, use it as the active one.
-                    activeProxy = (Proxy) proxies.get( 0 );
-                }
             }
         }
 
Index: src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java
===================================================================
--- src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java	(revision 737823)
+++ src/main/java/org/apache/maven/settings/DefaultMavenSettingsBuilder.java	(working copy)
@@ -89,7 +89,7 @@
     {
         Settings settings = null;
 
-        if ( settingsFile.exists() && settingsFile.isFile() )
+        if ( settingsFile != null && settingsFile.exists() && settingsFile.isFile() )
         {
             Reader reader = null;
             try