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Don't do it!

I got a used iMac and the previous owner deleted the Classic folder and now I can't install Unreal Tournament, or Quake III, or any of my old school games 🙁

Why not send it to me instead? 😉
 
Go for it! screw OS 9 dependency. delete the System Folder as well as Applications (OS 9)... after you make sure there's no X-compatable apps inside that you use (for instance, Appleworks itself runs in both). And congrats for cutting the Classic umbilical cord 🙂

paul
 
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