AMENDMENT NO. 5 TO CREDIT AGREEMENT AND AMENDMENT NO. 3 TO SECURITY AGREEMENT

Exhibit 10.39

AMENDMENT NO. 5 TO CREDIT AGREEMENT

AND AMENDMENT NO. 3 TO SECURITY AGREEMENT

This Amendment No. 5 to Credit Agreement and Amendment No. 3 to Security Agreement (this “ Amendment ”), dated as of December 23, 2008, amends that certain Credit Agreement, dated as of September 19, 2005 (as amended, the “ Agreement ”), among the financial institutions from time to time parties thereto (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”), Bank of America, N.A., with an office at 55 South Lake Avenue, Suite 900, Pasadena, California 91101, as administrative agent for the Lenders (in its capacity as agent, the “ Agent ”), Spansion LLC, a Delaware limited liability company (“ Borrower ”), and Spansion Inc., a Delaware corporation (“ Parent ”), and amends that certain Security Agreement, dated as of September 19, 2005 (as amended, the “ Security Agreement ”). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.

RECITALS

WHEREAS, Borrower, the Lenders and the Agent have entered into the Agreement and Borrower and Agent have entered into the Security Agreement;

WHEREAS, Borrower desires to amend the Agreement and Security Agreement; and

WHEREAS, the Agent and the Lenders are willing to do so, subject to the terms and conditions stated herein.

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Agent, the Required Lenders, and the Borrower hereby agree as follows.

AGREEMENT

Section 1. Amendments to the Agreement . The Agent, the Required Lenders, and the Borrower agree that the Agreement is hereby amended as follows

A. Section 1.1 of the Agreement is hereby amended in its entirety to read as follows:

1.1 Total Facility . Subject to all of the terms and conditions of this Agreement, the Lenders agree to make available a total credit facility of up to $45,000,000 (the “Total Facility”) to the Borrower from time to time during the term of this Agreement. The Total Facility shall be composed of a revolving line of credit consisting of Revolving Loans and Letters of Credit described herein.

B. Solely upon the effectiveness of the consent set forth in Section 3 below, Section 7.13 of the Agreement will be automatically amended by deleting the “and” immediately prior to clause (i) and adding the following clause (j) at the end of such Section:

“, and (j) the UBS Debt.”

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C. Solely upon the effectiveness of the consent set forth in Section 3 below, Section 7.14 of the Agreement will be automatically amended by deleting the “and” immediately prior to clause (c) and adding the following clause (d) at the end of such Section:

“, and (d) the UBS Debt.”

D. Section 7.22 of the Agreement is hereby amended in its entirety to read as follows:

7.22 Minimum Cash Flow . On a consolidated basis, the Borrower (or, following the Approved Restructuring, Parent) shall have Cash Flow on the last day of each of the measurement periods set forth in the table below (each such day a “determination date”), calculated for the measurement periods ending on each such determination date, of at least (or no more negative than) the amount in such table corresponding to such measurement period date (amounts appearing in parentheses are negative):

Minimum Cash Flow levels for each fiscal quarter in any Fiscal Year commencing with Fiscal Year 2010 shall be determined by Agent, based upon the Latest Projections for such Fiscal Year delivered to Agent in accordance with Section 5.2(f) . Such financial projections must credibly reflect expected performance by Borrower in each quarter of such Fiscal Year and shall otherwise be satisfactory to Agent in its reasonable credit judgment.

E. Section 7.23 of the Agreement is hereby amended in its entirety to read as follows:

7.23 Minimum EBITDA . On a consolidated basis, the Borrower (or, following the Approved Restructuring, Parent) shall have EBITDA on the last day of each of the fiscal quarters set forth in the table below (each such day a “determination date”), calculated for the four fiscal quarter period ending on each such determination date, of at least the amount in such table corresponding to such determination date:

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Minimum EBITDA levels for each fiscal quarter in any Fiscal Year commencing with Fiscal Year 2010 shall be determined by Agent, based upon the Latest Projections for such Fiscal Year delivered to Agent in accordance with Section 5.2(f) . Such financial projections must credibly reflect expected performance by Borrower in each quarter of such Fiscal Year and shall otherwise be satisfactory to Agent in its reasonable credit judgment.

F. Article 7 of the Agreement is hereby amended by adding the following Section 7.34 at the end of such Article:

7.34 Amendment to The UBS Loan Documents; Restriction on UBS Accounts . Neither the Parent nor any Borrower shall (a) amend, modify, or change, or shall permit or agree to, any amendment, modification, or change to the UBS Loan Documents, or (b) notwithstanding anything to the contrary contained in any Loan Document, maintain any securities, money market or deposit account with UBS other than the securities account in which the UBS Collateral is maintained, and Borrower further agrees that at no time shall such account contain any securities or assets other than the UBS Collateral.

G. Section 9.1(d) (Events of Default) of the Agreement is hereby amended to add to the first line thereof, after the reference to “Noteholder Obligations” the following:

“, the UBS Debt”

H. Annex A to the Agreement is hereby amended by adding the following definitions in the appropriate alphabetical order:

“ Amendment No. 5 ” means that certain Amendment No. 5 to Credit Agreement, dated as of December     , 2008 by and among Parent and Borrowers, on the one hand and Agent and the Lenders, on the other hand.

“ AR Securities ” means those certain auction rate securities more specifically described in Schedule ARS-1 to the Credit Agreement.

“ Availability Block ” means a reserve established by Agent in an amount equal to $25,000,000.

“ Cash Flow ” means, with respect to any fiscal period of Parent, the amount equal to EBITDA, minus Fixed Charges minus , Capital Expenditures (excluding Capital Expenditures funded with Debt (other than Revolving Loans and other revolving advances or revolving loans under any of Parents’ or Borrowers’ credit facilities), but

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including, without duplication, principal payments with respect to such Debt), plus the net cash proceeds arising from: (i) the sale of any capital assets, and (ii) the sale by Borrower or Parent of its stock issued in connection with a round of equity financing (so long as the issuance of such stock is permitted hereunder).

“ Fixed Charge Coverage Ratio ” means, with respect to any fiscal period of Parent, the ratio of (a) the sum of EBITDA, minus Capital Expenditures (excluding Capital Expenditures funded with Debt (other than Revolving Loans and other revolving advances or revolving loans under any of Parent’s or Borrowers’ credit facilities)), to (b) Fixed Charges.

“ Fixed Charges ” means, with respect to any fiscal period of Parent on a consolidated basis, without duplication, cash interest expense, scheduled principal payments of Debt (other than any repayments of Revolving Loans and any other revolving advances or loans under any of Parent’s or Borrowers’ credit facilities), and Federal, state, local and foreign income taxes.

“ UBS Collateral ” has the meaning specified in Section 3 of Amendment No. 5.

“ UBS Debt ” has the meaning specified in Section 3 of Amendment No. 5.

“ UBS Loan Documents ” has the meaning specified in Section 3 of Amendment No. 5.

I. The definition of “ Applicable Margin ” contained in Annex A to the Agreement is hereby amended in its entirety to read as follows:

“ Applicable Margin ” means:

(i) with respect to Base Rate Revolving Loans and all other Obligations (other than the LIBOR Rate Loans, the Unused Line Fee and the Letter of Credit Fee), 1.50%;

(ii) with respect to LIBOR Revolving Loans, 3.50%;

(iii) with respect to the Unused Line Fee, 0.50%; and

(iv) with respect to the Letter of Credit Fee, 3.50%.

Commencing on January 1, 2009, the Applicable Margins shall be adjusted (up or down) prospectively on a quarterly basis as determined by the Borrower’s consolidated financial performance, calculated pursuant to the terms of the last paragraph of this definition. Adjustments in Applicable Margins shall be determined by reference to the following grid:

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