The classpath entry does not match with the pom entry for commons-fileupload:
    <dependency>
      <groupId>commons-fileupload</groupId>
      <artifactId>commons-fileupload</artifactId>
      <version>1.1.1</version>
      <type>jar</type>
    </dependency>

.classpath:
<classpathentry kind="var" path="M2_REPO/commons-fileupload/commons-fileupload/1.0/commons-fileupload-1.0.jar"/>

Change the .classpath line to read:
<classpathentry kind="var" path="M2_REPO/commons-fileupload/commons-fileupload/1.1.1/commons-fileupload-1.1.1.jar"/>