ok,
- delete sda4
- resize sda3 to 110Gb (or so)
- run the installer
- when you get to the partitioning stage again, there should be a new option "Use largest contiguous free space") - select that, and install
Max of 4 partitions is a hard limit, set by the BIOS
there is absolutely no way around this, and is the same across all OSs
(this is why when you first ran the installer, your only options were to overwrite existing partitions)
Fortunately, a partition can hold multiple "virtual partitions" - a so called extended partition
Deleting sda4 reduces your partitions down to 3
meaning Ubuntu can install in a fourth, extended partition
In this extended partition, you'll have the root file system and the swap partition