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#!/usr/bin/perl

...
my $line = 'substitute for $foo in $bar here';
$line =~ s/(\$\w+)/"defined $1 ? $1 : ''"/eeg;
print $line, "\n";

hairbear% ./test2.pl
Use of uninitialized value in substitution iterator at ./test2.pl line
+ 11.
substitute for  in  here