Hi nhays331,
You are running a newer version of PHP then I am, but I wanted to make sure that you specifically setup PHP for windows mail. There should be a section in your php.ini that looks something like this:
; For Win32 only.
SMTP = YOURSERVERNAME
smtp_port = 25
; For Win32 only.
sendmail_from = username@YOURDOMAINNAME.EXT
Obviously you should change YOURSERVERNAME to the name of your server (FQDN should work. We use the netbios name). Also custome username and YOURDOMAINNAME.EXT.
Also since you are running Exchange you may need to tell Exchange to allow the web server to send mail.
Hope this points you in the right direction.