Propagation of coupled electromagnetic TE-TE wave in a nonlinear plane layer is considered. The layer is located between two half-spaces with constant permittivities. The permittivity in the layer is described by nonlinearity with saturation. The physical problem is reduced to a nonlinear two-parameter eigenvalue problem for a system of (nonlinear) ordinary differential equations. Existence and uniqueness of solution to the two-parameter eigenvalue problem is proved. Iteration method for solving given problem is presented. Convergence theorem of the iteration method is proved.