SANTA CRUZ, Calif. -- Two Watsonville teens accused of fatally stabbing a 22-year-old man in Santa Cruz Friday night have been charged with murder and face up to life in prison if convicted, according to the Santa Cruz County District Attorney's Office.

Martin Holguin, 19, and a 17-year-old who prosecutors have not named, have been charged with murder and several enhancements for acting as active members of a criminal street gang in the fatal stabbing of Vincente Christopher Moreno, Assistant District Attorney Steven Moore said.

The 17-year-old has been charged as an adult, and both defendants face up to life in prison if convicted on all charges and enhancements, Moore said. The 17-year-old is being held in juvenile hall on $1 million bail, and Holguin remains in the county jail on $1 million bail, according to Moore.

Santa Cruz police officers responded around 11 p.m. Friday to reports of the stabbing in the area of Soquel Avenue and Frederick Street, police spokesman Zach Friend said.

Moreno, Holguin and the 17-year-old boy had apparently been involved in a verbal argument and exchanged gang slurs on a Santa Cruz County Metro bus before they exited and the fight escalated, according to police.

Moreno was stabbed several times in his torso and the suspects allegedly fled toward Capitola Road.

Santa Cruz County sheriff's officials were able to locate the 17-year-old suspect, who was identified by a witness to the stabbing, police said. The teen was arrested on suspicion of murder after being treated for a cut on his hand.

Police searched the area and early Saturday morning located a knife investigators believe is the murder weapon.

Holguin was not found until around 3 a.m. Sunday, when police arrested him at a campsite near the Pajaro River.

Both defendants appeared in court this morning for arraignment and scheduled further arraignment for Jan. 21, Moore said.

Friday's homicide was the city's first for 2009, with two homicides reported in 2008, according to Friend.