XINU, and most other operating systems, simplify the context switching code by making the assumption that there is always at least one ready process available to be run at any time. This is a good thing; consider the alternative. What would you do next if you were about to reschedule but there are no processes available to run?
In XINU, this assumption is satisfied by the NULL process. We will look at it later, but for now know that this process is the lowest priority process in the system (and therefore never runs unless there are no other processes available to run). The process is essentially an endless loop.