Q: Synchronizing iPhone exchange contacts with iCloud

If you want to sync your exchange contacts with iCloud, you'll have to copy them to the iCloud account.  If you want to do that, do the following (this assumes that the only non-iCloud account you are syncing contacts with is your exchange account):

1. Go to Settings>iCloud, turn Contacts to Off, choose Delete from My iDevice when prompted (any iCloud contacts will still be in iCloud).
2. Download the app My Contacts Backup.  (If you have more than 500 contacts to transfer you will need the “Pro” version.  If you aren't sure, start with the free version; it will tell you if you have more than 500 whdn you run it.)  Use the app to back up the remaining contacts on your phone (from your exchange account) as a vCard attachment to an email that you send to yourself.  Confirm that you have received the email.
3. Go to Settings>iCloud and turn Contacts back to On.
4. Go to Settings>Mail,Contacts,Calendars>Default Account (in the Contacts section) and set this to iCloud.
5. Go to Settings>Mail,Contacts,Calendars…tap your exchange account turn off contacts syncing  (otherwise you will see duplicate contacts on your device).*
6. Open the My Contacts Backup email and tap the attachment to import the contacts from the exchange account back to your device, and to iCloud.

* If you want to keep syncing with your exchange account, you'll have to open the contacts app, tap Groups, then tap the uncheck the exchange account so it's no longer in view.  Otherwise you will see duplicates of these contacts on your device.