.PS
gen_init
  linewid = linewid*0.8
  circlerad = 0.35/2
  bw = boxwid/2
  bh = boxht/2
Observer: [ {"$r$" above ljust}
  arrow
S: circle
  "$-\;$" below rjust at S.s
  arrow <- down linewid/2 from S.s
  box ht bh wid bw "$K$"
  arrow <- down linewid/2
  line right linewid "$\hat x$" above
Obs:box wid linewid*5 ht boxht*5/4 \
    "$\frac{d}{dt}\hat x = (A{-}LC)\hat x + B u + L y$" 
  "\sl Observer" above ljust at Obs.sw
  arrow <- right linewid/2 from 3/4<Obs.se,Obs.ne>
  line to (Here,S)
  {"$u$" above at Here+(linewid/2,0)}
  arrow from S.e to Here+(linewid,0)
Plant: box wid boxwid*3/2 ht boxht*5/4 \
    "$\frac{d}{dt} x=Ax+Bu$" "$\quad y=Cx$\hfill\hbox{}"
  "\sl Plant" above ljust at Plant.sw
  arrow right from Plant.e
  "$y$" above rjust at Here+(0,2pt__)
  move to last arrow.c 
  line to (Here, 1/4<Obs.se,Obs.ne>)
  arrow to (Obs.e,Here)
] #with .nw at last [].sw+(0,-0.5)
.PE