NEW YORK, Feb 12 (Reuters) - Mattel Inc (MAT.N: Quote, Profile, Research), the maker of Barbie dolls and T.M.X. Elmo, said on Wednesday it reached a five-year licensing deal to make toys based on characters from World Wrestling Entertainment (WWE.N: Quote, Profile, Research) beginning in 2010.

Financial terms of the agreement were not disclosed.

Toy maker Jakks Pacific Inc's (JAKK.O: Quote, Profile, Research) licensing pact with WWE expires in 2009. A U.S. federal court in December dismissed WWE's lawsuit against Jakks, which accused the toy maker of bribery to win a lucrative licensing deal based on wrestling superstars.

Despite last year's recall of millions of Mattel toys due to safety and lead paint, WWE was "comfortable" with the Mattel's response to the problem, said Donna Goldsmith, WWE's executive vice president of consumer products.

"Mattel had some issues this summer that they have rectified through a number of policies and procedures and they took us through that," Goldsmith said in an interview.

Mattel, the largest U.S. toy maker, will make WWE-themed action figures, games and puzzles, plush toys and remote controlled vehicles. (Reporting by Justin Grant; Editing by Derek Caney)