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In this paper a systematic approach, based on the linear-state-observer design for constructing two chaotically synchronized systems, is developed. The proposed method is then applied to suggest a means to secure communications. The method combines chaotic masking and chaotic modulation, where the information signal is injected into the transmitter and simultaneously transmitted to the receiver. Furthermore, two well-known chaotic systems, Rossler and Lorenz, and a hyperchaotic ROssler system are considered as illustrative examples to demonstrate the effectiveness of the proposed approach. Index Terms - Chaos, chaotic synchronization, secure communication, state observer.