How to change this sentence into reported speech? You didn't need the new one. The old one worked perfectly well.

You=David
The speaker =Kate

Kate said that David

[1] on her way home from practice, rebekka found a gold man’s watch. [2] she wasn’t sure what to do. [3] there was no name engraved on the back. [4] looking at the gold links on the band, the watch seemed to rebekka to be expensive. [5] she felt badly that someone had lost such a nice watch. what is the best revision of the troublesome modifier in sentence 5?