Memphis, Tennessee (CNN) -- With just over three minutes left in the state championship, Coach Penny Hardaway called a timeout.

He didn't like what he was seeing. Down by 15 points, his middle schoolers were quitting. It stood against everything he had instilled in them:

Don't use the inner city as an excuse to fail . You can overcome your circumstances . Always dream big.

The former NBA All-Star and greatest basketball player in Memphis history huddled his team of 12 together. He looked them in the eyes. He could see his reflection from 25 years ago: young teens from the city's roughest projects longing for positive mentors.

"Just give me all you got," he told them.

He was thinking a fight to the finish would let the players walk out with their heads high, their pride intact, even if they lost.

But what happened next defies explanation, is beyond description. A boy playing for his ailing father did something extraordinary. A man who grew up without one, who'd come to serve as a surrogate dad to a dozen boys, watched in awe.

Hardaway, now 40, made more than $120 million in a pro basketball career that spanned 16 seasons. Yet one of his crowning achievements came not as a player but as coach to the seventh- and eighth-graders of Lester Middle School, the same school that gave him a shot in life.

A coach's miracle

In October 2010, Desmond Merriweather lay in a hospital bed in Memphis. He'd battled colon cancer for more than a year. Chemo, radiation and multiple surgeries had done little to stop the cancer's spread.

Doctors gave the Lester Middle School head coach 24 to 48 hours to live. His pastor, the Rev. Larry Peoples -- "a prayer warrior" -- stood at his bedside and bowed his head. Family and friends gathered in the room.

Merriweather had returned to his old neighborhood -- gang-infested Binghampton -- to coach basketball. He'd moved from Jackson, Tennessee, where he'd lived since earning his college degree. He wanted to mentor middle school kids in the blighted neighborhood, to keep them from going down the wrong path.

"I wanted to show them that your heart is bigger than what you think it is."

But it seemed he wouldn't live to see the season.

Merriweather, now 38, doesn't know quite how to explain what happened. He had gone through surgery and then was given his death sentence. The doctors had said something about complications.

"The only thing I can remember is waking up," Merriweather says.

Gradually, he emerged from danger. He attributes his recovery to the power of prayer, although he's still fighting the disease.

"When the doctors gave up on me, I never gave up on myself. I'm a fighter. I knew I had to come back to my son and my daughter and my wife -- and most of all, my team."

He asked God to give him one more chance, to return him to the hardwood floors of Lester Middle. The boys needed him. More than anything, he longed to coach his son Nick again.

Among the hospital visitors was his boyhood friend, Anfernee "Penny" Hardaway. Merriweather had tagged along with the rising star at school, at outdoor courts, at the neighborhood gym.

"When we were growing up, we would see people get shot in the park -- just a whole lot of crazy, chaotic things," Merriweather says. In Hardaway, Merriweather saw a young leader who was going to make it.

"I want to do something for your kids," Hardaway told the ailing coach.

Merriweather recovered enough to return to his team that season. But as the next season got under way, the chemo drained him of strength. Hardaway had stayed in touch with Merriweather throughout his recovery, peppering him with questions. What type of team do you think you're gonna have? How good are they?

"I didn't want to brag or anything, but I knew we had a good team," Merriweather says.

He invited Hardaway to meet the players one afternoon last November. "I came over and saw the team and just instantly fell in love," Hardaway says.

In an era when stars parachute in, smile for the cameras and then leave, Hardaway did just the opposite. He began driving his Bentley, Cadillac Escalade and Range Rover down the streets of Binghampton. Residents rushed from their homes, waved and cheered.

He'd pull into the school on Carpenter Street, nicknamed "C Street" because it's known Crips territory, one of four gangs that dominate the neighborhood.

He'd show up for team practices even before Merriweather arrived. Hardaway started first as a volunteer. Still weakened from cancer, Merriweather soon delegated his duties. Hardaway became Coach Penny. He coached for free, with Merriweather remaining at his side.

Hardaway talked to the team about discipline, about class, about dignity. If you wanted to play for him, you had to focus on school. He instituted a mandatory tutorial program.

He'd arrive early in the morning, stick his head in the classrooms, make sure his boys were behaving. He quizzed teachers about the players' progress reports: What areas do they need help in?

"I wanted to make sure they understood that education is more than sports," Hardaway says. "A lot of these kids go from home to home to live. I had to make sure they're doing their homework, make sure they're going to class, make sure they're not sleeping in class. ... It's all to make them know that I do care."

Grades jumped from a 2.5 grade-point average -- about a B-minus or C-plus -- to nearly 2.9, a solid B. Hardaway's goal is to have each of his players graduate from college one day. (In 2003, while still in the NBA, he quietly earned his college degree from the University of Memphis.)

He lectured the team about life in Binghampton. He'd walked the same streets, lived in the same projects. Of the 12 players on the team, nine don't have fathers in their lives. At least six live in cramped one- and two-bedroom apartments with more than six siblings.

"Don't use not having a father as an excuse," Hardaway barked. "There are a lot of people who came out of adverse situations and made it. Use it as motivation. Use it to drive you."

Hardaway, who grew up without a father, became the players' surrogate dad. He told them not to be so angry, "to believe in yourself and believe in what you're doing."

"Whenever they got disappointed or whenever I tried to discipline them, they would go into a shell, and they responded negatively every time," Hardaway says. "I'd tell them: You're using that as an excuse."

Merriweather, with Hardaway's backing, met with the Bloods, Crips, Vice Lords and Gangster Disciples. The message: Keep your hands off our kids. The gang leaders agreed. They wanted the boys of Lester Middle to succeed, too.

To build camaraderie, Hardaway hosted the players at his sprawling mansion in suburban Memphis. He wanted to show them a side of Memphis they'd never seen: that if you work hard, you get rewarded. He held team sleepovers to build family. He taught them little things: tuck in your bed, fold your clothes, do your laundry.

"I can't even put into words how much Penny means," Merriweather says. "He has this presence about himself. When he comes into the room, he just lights the room up."

On the court, the Lester Lions roared. Some games were laughably lopsided: 69-6, 70-8, 67-4. Starters typically played only half a game because they demolished teams so badly.

College recruiters drooled over the stat line of 6-foot, 4-inch center Robert Washington: an average of 23 points, 17 rebounds, five blocks per game.

The stat Hardaway and Merriweather boast about most comes from the classroom: Washington has gone from a 2.0 GPA to 2.9, the most improved student not just on the team but in the entire school.

"Penny loves me," the eighth-grader says shyly, "and I love him."

Around Binghampton, Penny earned a new nickname: "Coach Carter," after the 2005 Samuel L. Jackson movie about a successful businessman who returned to his old neighborhood to coaching glory, demanding nothing but greatness.

The grandmother who instilled love, demanded excellence

At his peak, the 6-foot-7 Penny Hardaway was a hybrid guard: Michael Jordan, Magic Johnson and Larry Bird all rolled into one. He couldn't be stopped.

He starred in college at the University of Memphis (then Memphis State) and was the No. 3 draft pick in the NBA in 1993. He was immediately traded to the Orlando Magic.

At the age of 22, he signed a whopping $65 million contract. The kid from the Red Oak and Tillman Cove projects slept on his first king-size bed in a five-bedroom house. Up to that point, he'd slept only in twin beds, his long legs hanging off the end.

"I was blessed to get the contracts I had," he says, "for something I would've done for free."

He teamed up with Shaquille O'Neal and took the young Magic franchise to the NBA Finals in 1995, only to fall short of the championship. The next summer, he won a gold medal on the 1996 Olympic team.

Hardaway became the face of a Nike ad campaign. In the ads, Chris Rock famously voiced "Lil Penny," the trash-talking alter ego of the humble Hardaway. "You can't guard me. The Secret Service couldn't guard me," Lil Penny once boasted.

But Hardaway almost became a statistic of Binghampton before his career ever took off.

The summer before his freshman year in college, he and a friend were robbed at gunpoint. The car sped off but then stopped. Gunshots rang out. One bullet ricocheted off the pavement and struck his foot.

"I still think about, man, what would've happened if I got hit somewhere else. I could've passed away. I could've been paralyzed. Anything could've happened."

He would later pick the gangsters out of a police lineup. He didn't fear retaliation "because I knew I was doing the right thing."

Such courage was drilled into him by his grandmother.

A sharecropper from the cotton fields of Blytheville, Arkansas, Louise Hardaway crossed the Mississippi River and moved to Memphis, seeking a better future. She settled in Binghampton, purchased her own home. She cooked in the Memphis school system for years and worked as a nanny and maid.

As Louise Hardaway neared retirement in 1976, her daughter -- Hardaway's mother -- said she wanted to pursue a singing career and was hitting the road with her young boy.

"Oh, no, you're not," Louise Hardaway said. "You're not going to have him going from town to town. He stays here with me."

Reflecting back on that day, Hardaway marvels. His grandmother "had worked her butt off all these years, had her home paid off and now was finally going to get a chance to relax. And then I got dumped in her lap when I was 5."

Louise Hardaway demanded excellence. A strict disciplinarian, she wasn't going to have her grandson fall prey to gangs. She taught him to love the Lord, to rise up when others failed. She coined the nickname Penny, because he was pretty as one.

During his formative years, he knew his mother from postcards she sent from the road: California, Alaska, Hawaii. He never had a relationship with his father, who lived in Chicago. By the time he was 18, Penny Hardaway had only seen him about three times.

Hardaway's life became wrapped around Lester Middle School. The teachers embraced him. He played basketball all day after school, on the hardcourts outside Lester. Gunshots pierced the night.

Hardaway became the top-ranked high school basketball player in the nation. His father always promised to come see him play but never did.

"I would wonder every now and then, as any kid would, what my father was doing, wishing my father was here," he says. "But I would snap out of it really quickly and just keep doing what I needed to do."

Neighborhood elders took him in, protected him. They saw a gem in Penny.

And that's why he feels so compelled to intervene now. "I believe in giving back. I lived the dream. God blessed me to live the dream."

His grandmother died in September at the age of 95, a month before he began coaching at Lester Middle. "She'd be saying, 'That's exactly what I taught him to do.' "

He's giving back in other ways, too. He hopes to break ground on Penny's FastBreak Courts in suburban Memphis this year. The $20 million facility will house seven basketball courts, including a 2,000-seat arena, as well as an auditorium, a rehabilitation clinic and classrooms to tutor kids. He's teamed with a foundation aimed at promoting youth sports and fighting childhood obesity.

"I'm hoping that by leaving the neighborhood and going to the suburbs, the kids can at least start dreaming."

He has other business ventures: a barbershop and beauty salon in downtown Memphis and a turf business based in Miami. Nike continues to make his Foamposite shoes, which fetch hundreds of dollars -- sometimes thousands -- among "sneakerheads."

He's been gone from the NBA since 2007. The latter half of his career was plagued by pain. For basketball enthusiasts, Hardaway's career has always been marked by "what ifs," an amazingly talented player whose full potential was cut short by constant knee and lower leg injuries.

Championships, by which the game measures greatness, always eluded him.

The boy nicknamed King stands up

The game of basketball teaches life lessons: work with others, study to succeed, understand your teammates to win.

In the huddle during the championship, the Lester players hung their heads. Down 51-36 with just over three minutes left, the game appeared out of reach. Fayette East had beaten them by one point earlier in the season and was having its way in the title game.

"Just give me all you got," Coach Penny repeated one last time.

The neighborhood has a saying: "Binghampton, stand up." After a season of brotherhood, the Lester Lions weren't about to roll over now.

When the team hit the court, something magical happened.

Nick Merriweather had seen his father battle through cancer. His dad had gone through another round of chemo days earlier. It was time for Nick to stand up.

Coach Penny had told him before tipoff that his shot would be on target tonight, that his team would need him. He averaged about eight points a game, yet late in the fourth quarter, he'd struggled to score.

Coach Penny considered pulling him.

At 4-foot-11 and just 95 pounds, Nick was outmatched in height, weight and speed.

But not in heart.

Nick launched a three-pointer. Swish.

The crowd roared. Dad struggled to stand. He clapped and pumped his fist.

The defense clamped down. Lester Middle got steal after steal. Fayette East players withered under pressure.

And the smallest kid on the court wasn't done. He hit another, then another.

Nicknamed "King," Nick played like one. He nailed three three-pointers in a span of less than two minutes. Others chipped in, too.

"God, you're amazing," Coach Penny thought.

The game wasn't sealed until the final seconds, when Robert Washington -- the school's most improved student -- battled for an offensive rebound off a missed free throw and put the ball in.

The Lester Lions won the West Tennessee State title 58-57, finishing 28-3 for the season.

The players went bonkers; many cried.

Hardaway ranks it as one of his greatest achievements. "Standing on the sideline, I couldn't help them make a shot. I couldn't help them play defense," he says. "It was out of my control."

Weeks after the game, the players still greet Hardaway with high fives and hugs as he walks into the gym. He'd always given money to the school and neighborhood rec center. But this year, he's learned, "money isn't everything."

"Giving the time is just as important as giving the money," he says. "When you have an example who's lived in the same neighborhood, lived in the same apartments, walked the same hallways, that is motivating, and it drives them. Attitudes change."

Coach Merriweather hasn't stopped smiling. Late at night, he closes his eyes. He replays the game in his mind, over and over and over again. "I can't believe this really happened."

It's given him strength. "I'll never stop smiling until next year starts."

Nick Merriweather doesn't say much. He fights back tears when he tries to talk about his father's struggle. Yet, like his dad, he grins broadly when asked about the game. "I caught fire. Yes, sir," he says. "He told us to give it our all, and that's what we did."

Hardaway plans to return next year. He and Merriweather have something special planned, though they won't say exactly what.

Hardaway laughs when asked what Lil Penny would say of what transpired. He pauses, then breaks into the voice of his alter ego: "I told you my man was gonna come back! Everybody said he wasn't gonna come back. I told you he was. I told you."

CNN's Emma Lacey-Bordeaux produced the audio for this piece.