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Tom Cruise will pay "more than $10 million" in child support to Katie Holmes.
The former couple - who announced they were to divorce after five years of marriage last month - have reached an undisclosed agreement to end their marriage, but insiders insist reports the actress is to receive a $50 million lump sum are "ridiculous".
However, the sources tell TMZ.com that Tom, 50, is paying "a lot of money" in child support for their six-year-old daughter Suri, with payments for the next 12 years amounting to "more than $10 million".
Katie, 33, has sole custody of Suri but the 'Rock of Ages' actor will have substantial visitation rights.
Speaking about their split, Scientologist Tom and Katie - who registered at a Catholic church in New York this week - released a statement saying: "We are committed to working together as parents to accomplish what is in our daughter Suri's best interests. We want to keep matters affecting our family private and express our respect for each other's commitment to each of our respective beliefs and support each other's roles as parents."
Tom Cruise and Katie Holmes have reached a divorce settlement.
The 33-year-old actress' attorney Jonathan Wolfe confirmed a deal has been agreed between the pair, and he thanked the 'Mission Impossible' star and his representatives for their "professionalism and diligence" to bring about such a "speedy" decision.
No specific details have yet been revealed about the settlement, which comes after Katie filed for divorce from Tom after five years of marriage late last month.
Jonathan said in a statement obtained by People: "The case has been settled and the agreement has been signed. We are thrilled for Katie and her family and are excited to watch as she embarks on the next chapter of her life.
"This result could not have been achieved without the hard work of my partner Gary Skoloff and our co-counsel Allan Mayefsky, Michael Mosberg and Larry Trachtenberg of Aronson Mayefsky and Sloan and Peter Walzer and Chris Melcher of Walzer & Melcher in California.
"We thank Tom's counsel for their professionalism and diligence that helped bring about this speedy resolution."
Tom and Katie both confirmed in a separate statement that they are "committed" to working on their daughter's "best interests".
Katie and Tom's representatives, Nanci Ryder and Amanda Lundberg respectively, said in a statement: "We are committed to working together as parents to accomplish what is in our daughter Suri's best interests. We want to keep matters affecting our family private and express our respect for each other's commitment to each of our respective beliefs and support each other's roles as parents."
Lawyers for the couple have been in negotiations to settle issues including child custody, visitation and child support for their six-year-old daughter Suri, as well as property division.
Katie Holmes will ask Tom Cruise for child support at their first divorce hearing.
The 'Dawson's Creek' actress will appear in person when the hearing takes place in a family law courthouse in New York on July 17, where she will ask for money from her estranged husband.
A source told RadarOnline.com: "Katie's legal team will be requesting temporary child support to cover living expenses and the added security she has hired since her split from Tom.
"Tom's Los Angeles lawyers have officially been given notice. Tom's New York lawyer will appear and it's undetermined at this time if Tom will be in court also because he is currently shooting a movie."
Tom, 50, was "blindsided" when Katie filed for divorce from him last week after five years of marriage and sought legal custody of their six-year-old. It was reported he would file his own application for custody in Los Angeles, but it is not possible to file a case in separate states at the same time.
Tom's lawyers will have to argue proceedings be halted in New York and heard in Los Angeles instead. Katie filed for the divorce in New York because she believes she has a better chance of winning sole custody of Suri.
A source explained: "Tom will have to file a formal response to Katie's divorce petition in New York, and he is going to submit a motion to have the case dismissed because he believes it isn't the proper venue.
"Tom is hopeful that New York will do the right thing and allow him to file in California."
At the hearing in New York Tom could also request a temporary visitation order to see his daughter.
Friends of Katie believe she is in the more advantageous position at present, as she already has her legal team in place and prepared.
A source said: "Katie clearly has the upper hand in the proceedings at this point. It can't be emphasized enough that she took these extraordinary measures to protect her daughter, Suri."
Katie was said to have filed for divorce over her worries about the effects Tom's belief in Scientology would have on her daughter, and was concerned by his plans to send her to a Scientology camp.
Tom Cruise will file for divorce from Katie Holmes in California.
The 'Rock of Ages' actor was "deeply saddened" by Katie's decision to end their five year marriage on Thursday when she filed official papers in New York but he will now hit back and ask for the proceedings to continue in Los Angeles as that is where the couple are normally based.
He will also ask for joint custody of the couple's six-year-old daughter Suri, despite former 'Dawson's Creek' star Katie requesting she had sole custody of the little girl.
A source told website RadarOnline: "Tom will file a response in New York, asking that the divorce proceedings be halted in the Big Apple because California is the proper venue for the matter to proceed. Team Cruise is going to assert that Katie doesn't meet the residency requirements to file in New York, and that both live full time in California, specifically Los Angeles.
"At the same time, Tom will file for divorce in California, and will most request joint custody of Suri. There is absolutely no way that he is going let Katie have sole custody. The lines are being drawn, and this is going shape up to be a very contentious custody battle."
Katie - who has spent a the majority of her time over the past few months living in the couple's New York home with Suri - is thought to have filed the papers in New York because she had a better chance of gaining sole custody of Suri.
However, Tom - who also has two children, Isabella, 18, and 17-year-old Connor, with ex-wife Nicole Kidman - will claim Katie, 33, has no legal right to want the proceedings to happen in New York.
The source added: "Tom's lawyers will state in their response to Katie's divorce petition in New York that she didn't reside continuously in New York for a year, as the law states. Yes, they do have a home in New York, but Tom will argue that Los Angeles is where they live, period."
The couple married in Italy in November 2006 and despite the 49-year-old star recently claiming how happy they were, sources say Katie had been wanting to end the marriage for months.
They claimed she had grown tired of his "suffocating" behavior and was worried about raising their daughter in the controversial religion of Scientology, which counts Tom as one of its biggest followers.
Katie Holmes is concerned she is being watched by private investigators hired by Scientologists.
The former 'Dawson's Creek' actress filed for divorce from husband Tom Cruise - a famous devotee to the sci-fi faith - late last week, but is now worried her actions are being monitored due to a car parked outside of her apartment building in New York with a number of "suspicious-looking" men inside.
A source told The Sun newspaper: "About three days before the divorce was announced a Mercedes SUV was sitting outside Tom's apartment in Greenwich Village.
"They were sat about a hundred yards from the house - a couple of suspicious-looking characters in sunglasses.
"When Katie came out they tried to discreetly follow her. It was obvious they weren't paparazzi or press.
"They looked like former military or police and were carrying a small pocket digital camera."
Katie - who is reported to be asking for sole legal and residential custody of their six-year-old daughter Suri - was so anxious she had her own security people take photographs of the men and forward them to the police.
The source added: "Katie's security came out and started recording the men. Then police were called and went back to the car to ask them what they were doing."
The 33-year-old actress is believed to have become tired of Tom's devotion to the quasi-religion - also followed by John Travolta - causing her to ask for the divorce as she wants what is best for her daughter.
The insider said: "Katie just wants the best for Suri. This is awful for her but she is being very brave. It's a terrifying situation for Katie."
Tom Cruise is "deeply saddened" to be splitting from Katie Holmes.
The 49-year-old actor- has confirmed he is upset about the demise of his five year marriage but is focusing on his children Connor, 17 and Isabella, 19 from his relationship with Nicole Kidman and his six-year-old daughter Suri.
His representative said in a statement: "Kate has filed for divorce and Tom is deeply saddened and is concentrating on his three children. Please allow them their privacy."
Meanwhile, insiders close to the situation claim former 'Dawson's Creek' star Katie wanted to split from Tom - who has been married twice before - because she wants to "amp up her career".
A source told RadarOnline.com: "Katie just wants to live out of the spotlight of Tom. She wants to focus on her acting career, which has taken a backseat since her marriage.
"She is currently filming a movie and has another project lined up and she wants to amp up her career another notch, which she has struggled to do the past few years."
However, parenting style to their daughter Suri was also thought to be a problem.
The insider added: "Katie and Tom also have very different parenting views. Katie wants Suri to go to school with other children and have a grounded routine whereas Tom doesn't, he wants her schooled in the same manner as Connor and Isabella were.
"Tom is nowhere near as strict as Katie is and doesn't believe in disciplining Suri, whereas Katie believes that is important. Tom basically treats Suri as a little adult, however Katie treats her like a six-year-old child, and that causes some major clashes over parenting style."