As long as you receive a passing grade (>56), the exam grade will comprise 70% of your final grade, and your assignment grade will comprise the remaining 30%. In order to avoid unnecessary grade reductions, students that scored higher in the exam than on their assignment grade will receive a final grade based only on their exam grade (the assignments will be a "magen").
So, to reiterate:
If [exam_grade] > 56 [final grade] = max([exam_grade],0.7*[exam_grade]+0.3*[assignment_grade]) Else [final_grade] = [exam grade]
And yes, if it was not abundantly clear from the above you must pass the exam in order to pass the course.