Now the card says spend a defense token. Is it spend it (get rid of it?) or spend it (exhaust it?). Thanks!

Spend means Spend.

Spend means "If I am Readied, Exhaust me. If I am Exhausted, Discard Me."

This is different to Exhaust , which is "If I am Readied, Exhaust me. If I am Exhausted, You can't effect me."

and

This is different to Discard which is "Doesn't matter what state I am in, Get Rid Of Me."