In a small skillet, saute peppers in 1 tablespoon oil for 15 minutes or until tender; set aside.
In a large bowl, dissolve the yeast and sugar in warm water; let stand for 5 minutes. In a large saucepan, heat the milk, honey, salt and remaining oil to 110°-115°. Remove from the heat; stir in the cheese. Stir in 2 eggs and reserved peppers; add to yeast mixture. Add 2 cups flour and wheat germ; beat until smooth. Sir in enough remaining flour to form a soft dough. Do not knead. Cover and let rise in a warm place until doubled, about 1 hour.
Punch dough down; spoon into two greased 8x4-in. loaf pans. Cover and let rise until doubled, about 1 hour.
Beat water and remaining egg; brush over loaves. Bake at 375° for 25-30 minutes or until golden brown.